Carbon Bill's Hurdles: Price Tag, Stiff Opposition

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On Capitol Hill Tuesday, the Senate debates major legislation to combat climate change. But the measure comes with a big price tag and is likely to spark furious opposition.

RENEE MONTAGNE, host:

And as we just heard, the Climate Security Act as it stands may be too controversial to win approval, mostly because of fears about how much it will cost. NPR's Christopher Joyce reports on the kind of money that's at stake.

CHRISTOPHER JOYCE: The climate act would shift a lot of money from one part of the economy to another. Industries that emit greenhouse gases - mostly electric utilities, heavy industry and refineries - will have to start paying the government for permits to do that. And that will raise about $6 trillion by 2050.

The idea is to transfer some of that to consumers, who would be paying more for energy because of the permitting system. And the government would also use the money to push clean technologies to make energy without emitting greenhouse gases.

Economist Vicki Arroyo at the Pew Center on Global Climate Change says the government has tried this kind of thing before.

Ms. VICKI ARROYO (Pew Center on Global Climate Change): We have made a false start at it in the '70s when there were long lines at gas stations and Jimmy Carter made his now famous speech with the sweater on urging people to change their behavior, and also, frankly, investing unprecedented amounts in renewables and new forms of fuel. But with the low prices that we've seen for the decades since and the lack of political will here, we really didn't follow that path.

JOYCE: Oil, coal and natural gas, the major sources of CO2, are not cheap anymore. So the idea of using less of those fossil fuels should get more traction this time around, or so argue the climate bill's supporters. Those who oppose have their doubts, people like Kenneth Green, an environmental analyst for the American Enterprise Institute in Washington.

Mr. KENNETH GREEN (Environmental Analyst, American Enterprise Institute): It's not very hard math to say one trillion dollars divided by 300 million Americans is this many dollars per American. And once those numbers start being generated and start being publicized, the public's not going to be amused. I mean, every poll suggests people do not want to pay more for greenhouse gas reductions. They don't want to pay more in gas taxes. They don't want to pay higher energy rates. They just don't want to pay.

JOYCE: Lots of economists have been trying to figure just what the cost to consumers or to the economy would be if this bill becomes law. As you might expect, those figures vary widely. The National Association of Manufacturers, which adamantly opposes the bill, says a typical household could lose almost $7,000 a year in income by 2030. But the Natural Resources Defense Council counters that without some limit on greenhouse gases, the consequences - more hurricane damage, higher water costs, damage to agriculture - could cost Americans close to $2 trillion a year. And the group argues that finding replacements for fossil fuels will create new industries and new jobs. One way to look at the projected cost is to compare it to higher prices Americans already are experiencing. Vicki Arroyo points to the cost of a gallon of gas.

Ms. ARROYO: This bill basically suggests a $.25 increase in about 2025 or 2030 as opposed to the, you know, dollar-plus increase that we've seen in recent months.

JOYCE: An increase that people are not happy about, but are generally able to bear. As for the hit the whole economy will take, the Environmental Protection Agency recently calculated that the bill would slow the annual gross domestic product by as much as seven percent by 2050. But by then, the GDP will still have grown by 215 percent. The bill's supporters say that's not such a bad hit, then. Its opponents say it's way too much. A lot of energy experts do agree that without some as yet undiscovered new technology, energy is going to cost more. Among them is John Holdren, a professor of environmental policy at Harvard University.

Professor JOHN HOLDREN (Environmental Policy, Harvard): Throughout the history of the development and expansion of fossil fuels, society was getting the benefits of these versatile, convenient, inexpensive, concentrated sources of energy and not paying the full cost.

JOYCE: Estimates of the full cost of the climate act will have to wait until Congress comes up with a finished version months or years from now.

Christopher Joyce, NPR News.

MONTAGNE: Hear how climate change is affecting the world from Barrow, Alaska to Alice Springs, Australia. Just dig into the archives of our series Climate Connections at npr.org/climate.

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