What is the cost of staving off climate change?
Republicans in the U.S. Congress say they know how much it is going to cost to save the world from the predicted ravages of climate change. But others say their math is way off.
“It would cost every family as much as $3,100 a year in additional energy costs and will drive millions of good-paying American jobs overseas,” warned House of Representatives Republican leader John Boehner in response to House Democrats unveiling their climate-change bill on Tuesday.
Senate Republican leader Mitch McConnell offered the same figure. “According to some estimates, this tax could cost every American household up to $3,100 a year just for doing the same things people have always done, like turning on the lights and doing laundry.”
There’s a problem, though.
The Republicans cite a Massachusetts Institute of Technology study as the basis for their cost estimate. But a lead author of that study complained in a letter to Boehner on Wednesday that the calculation is way off.
John Reilly, an economist at MIT’s Sloan School of Management, said the average annual cost to U.S. families for controlling emissions of carbon and other harmful greenhouse gases is actually $340.
In a telephone interview with Reuters, Reilly said updates to his 2007 study that take into account some higher costs could nudge the figure up to around $440 per household per year.
Republicans say they simply took a $366 billion revenue estimate from a climate change bill that sputtered in Congress last year and divided by the number of U.S. households to come up with $3,100. The thinking is that the revenues would be collected in pollution permits to industries, a cost that likely could be passed on to consumers.
“Taking that number and saying that is the cost is just wrong,” Reilly said, adding that many other calculations, including government rebates to consumers, have to be factored in.
Don Stewart, a spokesman for McConnell, said there are no assurances yet that consumers would get rebates, which the MIT study assumed, and thus the $3,100 figure is accurate and possibly even higher.
“If they (Democrats) change their bill to give money back to consumers, the numbers on cost would change (downward),” Stewart said.
Eben Burnham-Snyder, a spokesman for Representative Edward Markey, one of Congress’ leading advocates of climate control legislation, saw other possibilities.
If a range of energy initiatives in coming legislation is factored in — electric vehicles, improved transmission and other alternative energy steps — he said that would “significantly cut down the costs and some say would save people money on energy bills.”
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Photo credit: Reuters/Kevin Lamarque (Demonstrators for clean energy hold a rally on Capitol Hill in Washington on March 2)