In his latest column for the New York Times, economist and liberal pundit Paul Krugman argues that a new report from the Chamber of Commerce, intended to show that reducing carbon emissions will be too costly, is actually a great piece of evidence for those who argue that the U.S. can lead the fight against climate change without appreciably hurting its economy.
"[I]f you focus on the report’s content rather than its rhetoric," Krugman writes, "you discover that despite the chamber’s best efforts to spin things ... the numbers are remarkably small."
Krugman dismantles the report, piece by piece, noting that its top-line figure — that pending EPA regulations could cost the economy around $50 billion between now and 2030 — is actually quite small. "That’s supposed to sound like a big deal," Krugman says of the $50 billion. "Instead, if you know anything about the U.S. economy, it sounds like Dr. Evil intoning 'one million dollars.' These days, it’s just not a lot of money."
Krugman goes on to argue that even these numbers from the chamber, unimpressive as they are, are probably higher than the actual costs will be. He claims that the likelihood of slower growth in the future, due to baby boomers retiring, as well as the advent of cheaper sources of solar power will reduce costs. What's more, Krugman notes, the U.S. economy is still in such bad shape that spending money in order to adhere to the new carbon rules would likely be a net-plus, since it would put idle people and resources to work.
Lastly, Krugman responds to a political argument that anti-environmentalists like the Chamber are fond of — the idea that the U.S.'s cutting back on carbon won't matter because other countries pollute, too:
Finally, let me take on the anti-environmentalists’ last line of defense — the claim that whatever we do won’t matter, because other countries, China in particular, will just keep on burning ever more coal. This gets things exactly wrong. Yes, we need an international agreement to reduce emissions, including sanctions on countries that don’t sign on. But U.S. unwillingness to act has been the biggest obstacle to such an agreement. If we start taking serious steps against global warming, the stage will be set for Europe and Japan to follow suit, and for concerted pressure on the rest of the world as well.
Now, we haven’t yet seen the details of the new climate action proposal, and a full analysis — both economic and environmental — will have to wait. We can be reasonably sure, however, that the economic costs of the proposal will be small, because that’s what the research — even research paid for by anti-environmentalists, who clearly wanted to find the opposite — tells us. Saving the planet would be remarkably cheap.