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Fuzzy Math from Cap and Trade Opponents

A full page ad claiming that cap-and-trade legislation would cost the US two million jobs ran in the News and Observer this morning. The ad was placed by EnergyCitizens.org, an organization not really made up of citizens as it turns out. EnergyCitizens is a group composed of business associations, antitax groups, transportation companies, oil groups and the American Petroleum Institute – none of which are citizens per se. The group sponsors rallies and is coordinating an email campaign against cap-and-trade legislation in the name of affordable energy.

It shouldn’t surprise anyone that a vested interest business-sponsored grassroots mobilization organization should, well, stretch the truth in its attempts to mobilize individual support. It is unlikely that Pennsylvania Oil and Gas Association or the North Carolina Petroleum & Convenience Marketers, two members of EnergyCitizens (sic), are too jazzed about the prospect of an energy future that doesn’t use as much oil.

Hence the advertisement. The St Petersburg Times, one of this nations best regional papers, reckons the ad is ‘barely true’. In this age of ‘truthiness politics’, where things that sound like they could be true pass muster as true, this rating could well be substituted by ‘truthy’, i.e. sounds true but is probably false.

The St Pete Times found that the number comes from CRA International, a consulting group that has done work in the oil, gas, mining and transportation industries. CRA reckon that while new jobs would be created by cap-and-trade – the green jobs we have heard much of – total employment would be ‘inevitably’ depressed.

Such language reminds me of sound advice given to the novice politician – never order a report you don’t know the result of beforehand. It is the bread-and-butter of consulting – delivering a report that the client expects. In this case, the CRA report to the Black Chamber of Commerce delivers what many employer and industry groups want to hear – that the status quo is preferable (and ignore the global warming thing).

The Congressional Budget Office begs to differ in its assessment of cap-and-trade:

“The cap-and-trade program…would probably have only a small effect on total employment in the long run…The small effect on overall employment would mask a significant shift in the composition of employment over time. A cap-and-trade program for carbon dioxide emissions would reduce the number of jobs in industries that produce carbon-based energy, use energy intensively in their production processes…
The shifts in demand caused by the policy would also create new employment opportunites in some industries…
The shift in employment between sectors of the economy would occur over a long period…The experience of the US economy over the last half-century in adjusting to a sustained decline in manufacturing employment provides evidence that the economy can absorb long-term changes and maintain high levels of overall employment…
[T]he churning of jobs [i.e. turnover] that wouild be spurred by climate legislation would be small compared with what normally occurs.”

Indeed thanks to the direction of some of the revenue generated through the sale of emission allowances to income relief for poor households, the CBO concludes that the poorest 20% of households in 2020 will actually be better off under cap-and-trade. For the middle class, costs are estimated to be an extra $6 or $7 a week in 2020, which is of a similar order to the cost to households of the summer gas price rise.

The option, of course, is to let the water lap at our door; for the Outer Banks to disappear underwater. Seems like an easy call.

2 Comments

  1. [...] This post was mentioned on Twitter by Pennsylvania Energy, Ben Oliver. Ben Oliver said: The Progressive Pulse – Fuzzy Math from Cap and Trade Opponents http://bit.ly/1pxQ9 [...]

  2. IBXer

    October 29, 2009 at 12:52 pm

    Yeah, everyone knows that you can reduce externalities without incurring new costs, but only if it is done by government mandate.