The Heat Is Online

US Inaction Could Cost $3.8 Trillion A Year -- Study

Study says inaction on climate change could cost trillions

Higher energy and water costs, hurricane losses would add up; Congress to take up legislation next month.

The Austin-American Statesman, May 23, 2008

If the United States doesn't do something soon to dramatically reduce greenhouse gas emissions, it could cost the country $3.8 trillion annually from higher energy and water costs, real estate losses from hurricanes, rising sea levels and other problems, an environmental group predicted Thursday. Southern states could bear the highest costs.

The study by the Natural Resources Defense Council and Tufts University comes as Congress is set to take up controversial global warming legislation next month.

The Lieberman-Warner Climate Security Act of 2008, sponsored by Sens. Joseph Lieberman, I-Conn. and John Warner, R-Va., would create a carbon "cap and trade" system that would force power companies, manufacturers and the transportation industry to cut greenhouse gas emissions by 4 percent below 2005 levels by 2012, and 71 percent by 2050.

Opponents of the bill, led by the U.S. Chamber of Commerce, the National Association of Manufacturers and petroleum producers, say it would be disastrous for the economy.

"Any way you look at it, Lieberman-Warner will result in major disruptions of our economy, soaring energy prices and millions of lost jobs," Keith McCoy, vice president of the National Association of Manufacturers, said in a statement this month.

McCoy's group estimates the Lieberman-Warner bill would reduce the nation's economic output by as much as $669 billion annually and result in up to 4 million job losses. Other studies by government and business groups predict that such legislation would cost U.S. businesses and consumers anywhere from $444 billion to $4.8 trillion by the year 2030.

Last month, the U.S. Energy Information Administration predicted that consumers' average annual home energy bills could rise by $30 to $723, in part because the proposed legislation would force power companies to use more expensive alternative energy sources.

Authors of the new study, however, say that not enacting the Lieberman-Warner proposal would be costlier.

"If you think it's expensive to do something about climate change, this tells you how expensive it will be to do nothing about climate change," said Tufts economist Frank Ackerman, who conducted the study.

Losses from Atlantic and Gulf Coast hurricanes would result in $422 billion in economic losses annually, the study predicts.

Increased energy and water costs related to droughts and higher air conditioning costs in Georgia, Florida, Texas and other Southern states could take another $1 trillion annually out of the economy, the study also predicts.