Cap-and-trade will have ‘tiny’ impact on US growth – report
London, 24 April: Implementing a greenhouse gas (GHG) cap-and-trade scheme in the US will only cost 0.03% of economic growth by 2030, according to a report by NGO Environmental Defense Fund (EDF). And not acting now could lead to higher costs in the future, the authors wrote.

“Our gross domestic product is projected to reach $26 trillion in January 2030,” said author Nathaniel Keohane, director of economic policy and analysis for the group.  “If we capped GHGs, according to these studies, the economy would hit that same mark by April.”

The study focused on cap-and-trade schemes which would lead to at least a 60% cut in current emissions levels by 2050, such as the Climate Security Act (S.2191) which is scheduled to be debated in the Senate in June.

EDF found that gas and electricity bills would rise by only a few dollars a month over the next few decades – an increase which most consumers already expect, claims the group.

A cap-and-trade scheme could boost the economy through the creation of jobs, as the country transitions to a low-carbon economy, said the authors, who found that the number of manufacturing jobs potentially impacted as a result of climate change policy over the next 20 years is below the number created and lost every three months. And the US could lead the way in developing much-needed low-carbon technologies for export. “Technological change is the engine of progress in the American economy,” says the report.

“We can afford an ambitious climate policy for just pennies on the dollar. It’s a small investment that will pay off in cleaner air, new jobs and a safer world,” said Keohane.

The study was based on analyses of economic modelling by the Energy Information Agency, Research Triangle Institute, Harvard University, the Massachusetts Institute of Technology and Pacific Northwest National Laboratories.