A Nice Try, Indeed

Jim Manzi attempts to push back against the CBO’s costing of Waxman-Markey:

First, this isn’t news. As per my post of about a month ago (helpfully titled “Waxman-Markey Cost Benefit Analysis”), this is consistent with the earlier EPA cost prediction of about $160 per household per year by 2020. Technically, the new CBO prediction is about 10% higher.

So what’s the problem? Doesn’t this mean that opposition to Waxman-Markey on cost/benefit grounds is blind and uniformed? The problem is that achieving the benefits of Waxman-Markey would require that the emissions abatement continue long, long past 2020. Costs will continue to rise decade after decade. The same EPA report projects that the average cost per household will be about $1,100 per year (equal to a little less than 1% of total economic consumption) by 2050. That’s according to the EPA, who I’m sure are grossly over-estimating the costs of environmental protection, just like those other anti-environmental crazies at the CBO.

First, it’s news because it’s the CBO. Second, the cost overestimates have nothing to do with any underlying issue bias; as Brad Plumer notes, those favoring and opposing regulations both historically overestimate costs. Third, the EPA report estimates a net present value cost of the legislation in 2050 at between $140 and $180 per household. And fourth, these estimates don’t include the benefits of reduced warming. And fifth, even Manzi’s stated cost is below the bunk cost estimates GOP legislators throw around.

And sixth, Manzi still thinks we have no obligation to reduce our emissions, even though the costs associated with our carbon output will overwhelmingly be felt by the global poor, who are least able to do anything about it.

Comments

  1. Doug says:

    Is $1,100 the net present value? It’s funny what a long view we have of future dollars and how aggresively we discount everything else.

  2. TW Andrews says:

    And sixth, Manzi still thinks we have no obligation to reduce our emissions, even though the costs associated with our carbon output will overwhelmingly be felt by the global poor, who are least able to do anything about it.

    Sure, but Waxman-Markey isn’t going have anything like the impact required to have a measurable impact on the global poor.

    If Waxman-Markey passes, Congress gets to claim that it’s “addressed global warming” even though there will be next-to-no demonsterable difference. Happily it doesn’t cost very much.

    People who don’t favor regulation on global warming really ought to get behind this bill because mostly what it addresses is the pressure to do something. It’s actual impact will be much more muted.

  3. Matt Rognlie says:

    Sure, but Waxman-Markey isn’t going have anything like the impact required to have a measurable impact on the global poor.

    Insofar as it’s used as an argument to not pass Waxman-Markey at all, this is a classic fallacy. You have some level X beneath which you categorize everything as “not measurable” and arbitrarily round it to zero. This is not how actual cost-benefit analyses work. In fact, since the marginal cost of carbon is increasing (more systemic risk to the climate, more potential for runaway feedback, etc.), even a small reduction of carbon emissions can be very beneficial. It’s not enough, of course, but the fact that it’s supposedly close to nothing (based on some subjective mental classification of “nothingness”) is not relevant.

    Maybe you’re just arguing that we need more legislation, in which case I completely agree. But I frequently see the same rhetoric from climate skeptics, and it’s important to point out how flawed this is as an argument against proactive climate policy.

  4. WJ says:

    How many degrees celsius is being figured that global temperatures will lower (or go less higher) because of this proposed bill? 1 degree, 2 degrees, 5 degrees?

    If less than 0.4 degrees by 2050 (or whenever), what is the quantitative benefit of that discounted back to today? By the way, do you know what is the discount rate that is being used to discount cost back 40 years (2050 to today)?