“Cutting
Carbon Emissions at a Profit:
Opportunities for the United States”
Thursday, May
3, 2001
2:30 – 4:00
pm, 1334 Longworth House Office Building
Negative economic impacts are often cited as the reason
why the United States should not implement domestic greenhouse gas reductions,
such as those required under the Kyoto Protocol. The Environmental and Energy
Study Institute (EESI) sponsored a Congressional briefing highlighting a
new comprehensive analysis of the economic effects of implementing greenhouse
gas reduction policies. The study entitled Cutting
Carbon Emissions at a Profit: Opportunities for the United States was released on May 3rd.
The
briefing’s panel featured two of the study’s lead authors: Dr. Florentin Krause and Dr. Stephen DeCanio. Dr. Krause is the
Director of the International Project for Sustainable Energy Paths
(IPSEP). He was
a co-author of the Second Assessment Report of the Intergovernmental Panel on
Climate Change (IPCC), Working Group III, and has a background as a staff
scientist at the U.S. national laboratories.
Dr. DeCanio is a Professor of Economics at the University of California
in Santa Barbara. He served as a Senior
Staff Economist at the Council of Economic Advisors during the second Reagan
Administration. In addition, the panel
will include Dr. Julie Gorte, Senior
Environment and Technology Analyst of the Calvert Fund.
According to the authors of the new report, existing major economic assessments of reducing domestic greenhouse gas emissions -- by the United States Energy Information Administration, the Clinton White House Council of Economic Advisers, the United States Department of Energy Interlaboratory Working Group, and the Stanford Energy Modeling Forum -- are seriously incomplete. The authors state that each previous study omits one or several of the major cost-reducing policy options identified by the IPCC, resulting in cost estimates that are far too pessimistic.
The new study integrates all the major cost-cutting policy options analyzed in past studies into a coherent least-cost policy framework. Three domestic policies -- a national carbon cap and permit trading program, productivity-enhancing market reforms and technology programs, and recycling of permit auction revenues into economically advantageous tax cuts -- are combined with international emission allowance trading in a real world scenario that recognizes that they all could be implemented jointly. In analyzing this integrated least-cost approach, the new study introduces no new models. According to the authors, it relies on established, peer-reviewed methodologies used in the major U.S. assessments to date.