CBO Finds That Cap And Trade Will Work - In The Long Term

(Extreme Ice Survey)

If you thought the last 10 months of debate over health care reform was fun, you're in for endless yuks once the United States Senate gets around to considering cap and trade.

The American Clean Energy and Security Act of 2009, also known as H.R. 2454, was passed on a near party-line vote by the House of Representatives and now awaits a vote in the Senate. As with nearly everything else in Washington, the bill has become a source of rancor and dispute between right and left - and everyone in between. But in its latest examination of the bill's likely impact, the Congressional Budget Office says the domestic cost of reducing greenhouse-gas emissions paints a more nuanced picture.

Projecting likely trend lines through the year 2050, the CBO concludes that the passage of the legislation will slightly dampen long-term GDP growth. But with a much larger economy by the middle of the century - the CBO expectation is that it will be approximately two-and-a-half times as large as it is today, the impact on peoples' everyday lives will be muted. (One caveat: CBO data tend to rely on some very precise assumptions; if they're false the analysis turns out to be meaningless.)

Digging into the numbers, CBO expects H.R. 2454 to cut real GDP by about 0.25% to 0.75% in 2020 and between 1% to 3% in 20505. But because of the presumed growth in the economy over the next four decades, it says that "losses in consumption and overall well-being would probably be smaller than losses in GDP."

Leaving aside the hot potato controversy about the existence of global warming, CBO nonetheless argues that "unchecked increases in greenhouse-gas emissions would also tend to reduce output compared with a situation where climate change did not occur - especially later in this century as emissions accumulated in the atmosphere." For proponents of cap-and-trade, this won't be of much immediate help because CBO goes on to say that the bulk of the presumed benefits of passing the bill would accrue during the second half of the century. Given society's increasing propensity for instant gratification, is the electorate - and its hired help in Washington - willing to take the long view?

That's a hard one. The economy has recovered from the freefall triggered during the latter days of the Bush administration but it's not expected to show job growth until sometime in 2010. What with the Republicans screaming "where are the jobs?", any plan that even remotely smacks of more job losses ahead is likely to get exploited for partisan gain in Washington. And indeed, CBO finds that passage of a cap-and-trade program will result in
a "significant shift" where old-line industries would give way to new, more efficient ones.

But again, CBO suggests that the long-term gain will trump short-term dislocations.

"The experience of the U.S. economy over the past half-century in adjusting to a sustained decline in manufacturing employment strongly suggests that the economy can absorb such long-term changes and maintain high levels of overall employment. As a result, CBO concludes that the cap would probably have only a small effect on total employment in the long run."

A convincing enough argument? All depends on whether CBO can win over politicians running for reelection today, not in the year 2050.

[jchenn]

It seems that liberals have become so detached from reality that they can't see the economic ship sinking. No, they shout--we still have other programs! And we're so passionate about them! Wake up and smell the coffee. Cap and trade isn't a solution, it's just a cleverly disguised tax and a chance for cronies like Gore to turn a buck managing the transactions.

[William_Harris]

Nothing should be passed in regards to reducing carbon emissions, since the entire premise on which it is based is a fraud and a lie. Cap and trade should be DOA.

[heyclammy]

Just like the mainstream media ignored the ACORN story until they had to report it, the lack of coverage on the climategate is telling. It seems to me, most journalists aren't journalists as much as tools for an agenda that most Americans disagree with.

In the past GW skeptics were met with the mantra that they were funded by the oil companies, therefore they lacked credibility. It's amazing to me we don't apply the same scrutiny to those funded by government and / or The U.N. Clearly many in government and the U.N. desperately want this to be true for they would reap the benefits of power and control, not to mention those like Al Gore and GE who stand to make billions if the Cap & Trade is passed. Will somebody at CBS tell me why you don't scrutinize these scientists through the same lens? Afterall, if the science is a slam dunk why is there a need to hide data, threaten and demean criitics instead of having a rationale debate... you know the kind of debate Al Gore routinely avoids.

[Omnivorous]

One of the most ignorant articles I have read.

The CBO IS A JOKE!!!

By the way, heard about the global warming scam lately?

Maybe we should render Al Gore down and deposit the oil in the strategic petroleum reserve. The creator of ManBearPig is so full of hot air it would be like adding octane boost to your gas tank.

Speaking of gas tank, how much co2 do you suppose his GulfSteam jets spew as they take him to points all over the globe in pursuit of ill gotten gains from his little "project"?

[SHEETPAN]

Kill the bill. The Hoax is exposed. Thinkers of the world unite!

[spillover]

Projecting likely trend lines through the year 2050, the CBO concludes that the passage of the legislation will slightly dampen long-term GDP growth. But with a much larger economy by the middle of the century - the CBO expectation is that it will be approximately two-and-a-half times as large as it is today, the impact on peoples' everyday lives will be muted.

Yea and 85% of that growth will be govt. This article is a load of crap.

[aburr]

wow, the left in the media are still desperately hanging on to this one. Sorry guys, a bunch of European Green Party types have led you around by the nose for years and you lack the ability to realize it.

Pass this mess and I predict alot of "capping" indeed, starting with the idiot Graham. We SC conservatives will eat him alive next cycle, I know I plan to personally do whatever I can to help a challenger to this dog.

[rightbehind]

Totally unreal. A solar panel can provide energy for typically 20 years or more. Once produced it doesn't produce any green house gases to provide energy. Instead the nut cases would rather dig coal, transport it to where it can be used, burn it which produces huge amounts of CO2, then it has to be removed, transported again to a location to be stored as waste that will be around for thousands of years until washed away.

[radicalc-2009]

Coop - Why are you still talking abou this? Have you been asleep for the last 5 days? Declan has reported on email leaks that have most likely revealed the Global Warming hysteria as a fraud. Why did your lead follow and land on top of his? Maybe you should talk to him and while your at it talk to the people who decides what to lead with.

CBS - Why aren't you all over these leaked emails. This is directly related to Al Gore, the Global Warming Debate and Cap and Trade which would be the single largest tax increase in history!

This is of global importance. It's being reported everywhere except for CBS, ABC, CNN and NBC! In Canada, England and all arounnd the world. It's all over the internet.

What the heck is going on with you guys... Where is journalism?

Even if the reports were wrong (which the aren't) - this is worth above the fold coverage if only to disprove it.

[Omnivorous]

Heard of Climate Gate yet?

As for the CBO, they have not had any credibility for decades and are now just lapdogs for Obama. Take a look at how they scored the so called health care bill and all of the totally outrageous assumptions they had to use to bring the cost down.

A total joke. Almost as big a joke as cap n tax.