Capping carbon emissions would cost U.S. households less than one cent on the dollar over the next two decades, an environmental group reported on Monday, disputing critics who say mandatory limits on greenhouse gases would cost jobs and damage the economy. "The United States can enjoy robust economy growth over the next several decades while making ambitious reductions in greenhouse gas emissions," the study by Environmental Defense Fund concluded. "And in the long run, the coming low-carbon-economy can provide the foundation for sustained American economic growth and prosperity."
By Deborah Zabarenko, Environment Correspondent
WASHINGTON (Reuters) - Capping carbon emissions would cost U.S. households less than one cent on the dollar over the next two decades, an environmental group reported on Monday, disputing critics who say mandatory limits on greenhouse gases would cost jobs and damage the economy.
"The United States can enjoy robust economy growth over the next several decades while making ambitious reductions in greenhouse gas emissions," the study by Environmental Defense Fund concluded. "And in the long run, the coming low-carbon-economy can provide the foundation for sustained American economic growth and prosperity."
The report was released before a June debate in the U.S. Senate on a carbon-capping plan.
!ADVERTISEMENT!"There are companies who have raised money who are deliberately trying to scare the American public as this debate and vote in the Senate approaches, into thinking this is going to put scads of people out of work and damage the economy," said Peter Goldmark of Environmental Defense Fund.
President George W. Bush has consistently opposed mandatory cap-and-trade programs to limit emissions of climate-warming carbon dioxide, citing damaging economic effects if such a plan becomes U.S. law.
The study analyzed five prominent models forecasting the economic impact of a cap-and-trade program similar to that set for debate on the Senate floor. These included scenarios from the U.S. government's Energy Information Agency, Harvard, Massachusetts Institute of Technology, Research Triangle Institute and Pacific Northwest National Laboratories.
By looking at all five of these models, the analysis found the projected median impact on annual growth over the next two decades is 0.03 percent, with average U.S. growth expected to continue at nearly 3 percent per year, about the same rate since the end of the World War Two.
That small downward impact is so slight as to be barely distinguishable from the measurement of error in the various models, said Nathaniel Keohane, an environmental economist and the report's author.
Capping greenhouse gases will cost average U.S. household less than one cent on the dollar per year over next two decades. By comparison, they now spend more than three cents on insurance, nearly four on national defense, 10 on Social Security.
Keohane said total U.S. economic output is expected to grow to $26 trillion by January 2030; with a cap on greenhouse emissions, the economy will reach that level in April 2030.
As to job loss due to climate policy, Keohane said the number of manufacturing jobs created or destroyed every three months in the United States is much greater than the cumulative projected impact over the course of 20 years.
Bush announced last week a goal to stop the growth of U.S. greenhouse emissions by 2025, but offered no specifics.
The United States is alone among major industrialized nations in rejecting the Kyoto Protocol, which mandates a cap-and-trade plan. U.S. officials have said any global plan should include developing, big-emitting countries including China and India.
(Editing by Doina Chiacu)
