Can't Stand the Heat.

Krugman: Climate change fantasies

A while back I wrote about anti-green economics — the insistence, by opponents of policies to reduce greenhouse gas emissions, that the economic cost of cap-and-trade would be immense and unsupportable. I cited Robert Samuelson, who ridiculed the Environmental Defense Fund for suggesting that major action on greenhouse gases would only cost a dime a day per person.

Now comes the Congressional Budget Office, which estimates the cost to households of Waxman-Markey in 2020 at $22 billion — which, given a projected population of 335 million, comes to 18 cents a day. Hah! EDH was being over-optimistic. Seriously, EDF was essentially right: the costs of cap-and-trade are very, very low.

The point is that we need to be clear about who are the realists and who are the fantasists here. The realists are actually the climate activists, who understand that if you give people in a market economy the right incentives they will make big changes in their energy use and environmental impact. The fantasists are the burn-baby-burn crowd who hate the idea of using government for good, and therefore insist that doing the right thing is economically impossible.

Chris in Paris (AmBlog): GOP falsely distorts climate bill costs

Predictable but they've never been very good with economics. Boehner and company were quick to add in job loss numbers - numbers that have been rejected by the author of the report they cite - but they still ignore the health care costs associated with climate damage. Obviously there is a cost to the climate bill but it's very small compared to the cost of not taking action. Maybe public health care freeloaders like Boehner don't see the costs, but that's not the case for everyone else. Washington Post:

GOP leaders have tried to portray the proposal as placing a heavy cost on Americans. Boehner has asserted that the bill would raise annual energy costs by $3,128 per household in 2015 and would drive jobs out of the country. He said in an April 2 news release that that figure did not include higher costs for food and consumer goods and services. The conservative Heritage Foundation has asserted that the cost could reach $4,300 a year.

Boehner's office said that it extrapolated its per-household figure from a two-year-old study of a cap-and-trade bill co-sponsored by then-Sen. Barack Obama (D-Ill.). That study, by John M. Reilly, a Massachusetts Institute of Technology professor, said that a cap-and-trade bill could generate $366 billion a year in revenue and that the GOP leader's office said it simply divided that by the number of households expected in 2015.

Afterward, Reilly sent a letter to Boehner accusing him of inflating the cost 10-fold by ignoring the offsetting benefits, such as tax cuts and free allowances, that are part of the current Waxman-Markey bill embraced by President Obama. Reilly said that the measure's cost for a family of four, in today's dollars, starts at about $75 in 2015, rises to nearly $510 by 2025, and then falls to $205 by 2050 as new technology works its way into power plants, building efficiency and automobiles. The average overall cost would be about $340 a year, he said.