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Climate bill shaves $533 billion off economy

Reuters – August 6, 2007

How much does it cost to save the planet?  According to Energy Information Administration the current bill to reduce the carbon footprint of the US would cost the US economy $533B. Is that too much?

I rarely trust these numbers as they always seem to be wrong. When have you ever heard of a study like this being correct? I think the models for economic prediction are almost as bad as the models to predict the climate! 

Also, the article states that gasoline prices will only be 23 cents higher in 2020 than 2009.  That would be a bargain compared to the steep increase in gasoline in the last 3 years! Statements like this only make me question the authenticity of the study.

I also question that this is enough.  What will this do for our economy (read this scary prediction).  Al Gore has asked for a 90% reduction. If we need 90% then why are we trying for 60%? If we don’t need to get to 90%, is 50% okay? How about 40%? Will 30% do the trick? I repeat my call for a ton of money to be spent on climate science to really model this out and then lets do exactly what we need to do – if anything.

A Senate bill to cut U.S. greenhouse gas emissions would raise energy prices and also reduce American economic output by more than half a trillion dollars over two decades, according to a government report released on Monday.

One proposal, introduced by Sens. Joseph Lieberman and John McCain, would gradually reduce total U.S. emissions by the year 2050 to 60 percent below 1990 levels.

However, the proposal would cut into the U.S. economy and raise gasoline and other energy prices paid by consumers, according to an analysis of the legislation by the Energy Information Administration.

The EIA said the fuel price increases would not be large enough “to create dramatic shifts in consumer behavior,” but there would be more demand for fuel efficient vehicles.

Read the rest of the article here.

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3 Responses to “Climate bill shaves $533 billion off economy”

  1. $533 Billion in reduced standard of living for Americans. That is all Americans. The rich will pay a lot, the middle class will slowly suffer, and the poor will get poorer. All in the name of a mandating that we theoretically can solve an unproven theory. Let’s not even think about 90% reduction. The higher the percentage, the exponential increase in the costs and misery. Either way, the misery will be there, but it will be masked due to the hidden costs and the indirect costs. It irks me to think of how many people want us to solve a problem and never consider the costs and that each individual is willing to fork out the cash them self to pay for it. Most people want the problem solved and have someone else pay for it. We all will pay for it – whether or not (1) it is a problem, (2) if it is a problem, we can possibly solve it. Everybody complains when the cost of gas goes up due to the market. Everybody complains when the prices of electricity goes up due to increased costs. Just wait until more mandates raise costs higher than they normally would.

  2. Remember the old saying “which weighs more, a pound of feathers or a pound of lead?” Lets ask the same question of taxes. Which is more costly a billion dollars in taxes on Income tax, Property tax, Sales tax, Social Security tax, Inheritance Taxes Carbon tax or any other taxes you can list. We tax all of those except Carbon taxes. Does that make sense or not? I don’t think so.

    Let’s eliminate the Sales tax and replace it with another tax. A Fossil Fuel/Carbon Sales tax. Well will tax consumers in there Carbon fuel purchasing if that consumer or business does not have to compete in an import/export market. That is a restaurant and store that doesn’t have to compete with china, but steel making and car manufacture would.

    In my state I pay a Sales tax when I buy a car, new and used, but I don’t pay a Carbon tax on the fuel. I pay a tax for roads, but nothing for the fuel. It’s the fuel that is polluting and depleatable. The car, if the money that I spend in the Sales tax was put into a more fuel efficient vehicle and made up for with a Carbon Fuel tax, we would be generally better off, same amount of money going to taxes, less Carbon fuel used.

    Let’s cut Property taxes in half. We need Property taxes in high density areas like cities, but lets eliminate property taxes for farmland, but tax the Carbon fuel used to plant and harvest the crops. The land is going to be here 50, 100, 500 or a million years. The fossil fuel we use will be long gone. Lets reduce the Property taxes on buildings, but increase the taxes on the Carbon fuel used to heat, light and cool the building. The building will be here 50, maybe a 100, and even 500 years from now, but the fossil/carbon fuel use the heat, power and cool the buildingw will be long gone. By taxing the Carbon fuel instead of the buildings we would be better off because we would have incentive to use less of the polluting and depleatable fossil fuels.

    We are Tax Stupid. We don’t respect the things that are here long term, like buildings and land by taxing them at the level we do. We don’t respect the things that are polluting and depleatable, like fossil/carbon fuels, by not taxing them to keep them around.

  3. Adding to my comments, it could be argued that it would be a huge wealth transfer to farmland owners to elimanate property taxes, but we would expect land rents to go down. The total cost of planting a crop might stay the same, we would just spend less on property taxes to spend more on fuel to make an incentive to use less Fossil/Carbon fuel.