Inaction on Climate Change Costs Economy: White House

By | July 30, 2014

As the Obama administration defends its efforts to curb carbon emissions this week, it’s taking a new tack: arguing that it is smart economic planning.

A new White House report says the cost of fighting climate change will increase 40 percent for every decade of inaction.

“Acting today will save us money,” Jason Furman, the chairman of the White House Council of Economic Advisers, which is releasing the analysis, told reporters on a conference call. “We know way more than enough to act.”

The projection is being released as sold-out forums are held in four cities to let citizens react to proposals from the Environmental Protection Agency to limit carbon dioxide from power plants, the top source of greenhouse-gas emissions.

The EPA effort is part of a larger climate plan unveiled by President Barack Obama last year. Obama has made curbing carbon pollution a central goal of his second term, and putting the rules in place is a cornerstone of that effort. In another prong of that plan, the Energy Department today will announce measures to curb methane releases, a less ubiquitous yet more potent greenhouse gas, said Dan Utech, a White House energy adviser.

While the EPA says its carbon rules will be a net benefit to the U.S. economy and result in lower electricity prices, the U.S. Chamber of Commerce and other business groups are warning that it could cause a jump in energy prices and damage to the tepid U.S. economic recovery.

Chilling Investments

“The uncertainty caused by this rule could have a chilling effect on investments throughout the manufacturing sector, potentially costing millions of jobs and damaging all aspects of our economy,” Howard Feldman, director of regulatory affairs at the American Petroleum Institute, will testify today at the public forum in Washington on the power plant rules, according to a copy of his prepared remarks.

In their report, the White House economists said there are costs of not acting. A jump in temperatures by 3 degrees Celsius, would mean a 0.9 percent cut to global output. An additional degree increase would mean a 2.1 percentage point annual cut, they estimate.

And those forecasts don’t account for what Furman termed “asymmetric risks,” or climate catastrophes. Those could be a rapid melting of polar ice or temperature spikes at the upper end of forecasts.

“Confronting the possibility of climate catastrophes means taking prudent steps now to reduce the future chances of the most severe consequences of climate change,” the report says. “The longer that action is postponed, the greater will be the concentration of carbon dioxide in the atmosphere and the greater is the risk.”

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