A House-passed bill that targets climate change through a cap-and-trade system of pollution credits would slow the nation's economic growth slightly over the next few decades and would create "significant" job losses from fossil fuel industries as the country shifts to renewable energy, the head of the Congressional Budget Office told a Senate energy panel Wednesday.
CBO Director Douglas W. Elmendorf emphasized that his estimates contained significant uncertainties and "do not include any benefits from averting climate change," but his message nevertheless contrasted sharply with those of President Obama and congressional Democratic leaders, who have suggested that a cap on carbon emissions would help revive the U.S. economy.
Elmendorf provided no numbers, or at least there weren't any in the story. In fact, what Elmendorf did in his analyis was echo the concerns that opponents have of this legislation. The energy sources being targeted would get cut back. That would raise energy prices. It would also disrupt our energy flow while energy sources are forced to change rather than change naturally.
Elmendorf pointed out that there are some potential benefits not only to the environment but to the economy as a result. For instance, with climate change that will affect crops and so farmers would need to take out extra insurance to protect against that.
Of course, it's not entirely clear that cap and trade would have any measurable affect on climate change, and of course, there are plenty that don't believe in global warming to begin with.
Because the CBO has become the gold standard used by both parties, this will be turned into a win for Republicans. The same Democrats that clung to the CBO's scoring of the Baucus bill must now swallow this scoring. Personally, I believe that the CBO has been given far too much deference. They do an excellent job but all of it is ultmately projection. Even Elmendorf himself will admit that figuring out what will happen in ten years is dicey at best. Still, it's no small political victory to have what is currently the most respected branch in government, the CBO, to reaffirm the Republican position on this issue.