Doug Heguy has 35 years development experience in the energy industry and is a former research fellow at the University of Texas LBJ School of Public Policy.
This blog post is first in a series on U.S. energy policy.
The United States and much of the rest of the world are spending trillions of dollars, and are set to spend trillions more for very little effect.
I come to these conclusions relying on the work of:
1) The UN’s climate change models, produced by the International Panel of Climate Scientists.
2) Dr. William Nordhaus, Professor of Economics at Yale University and recipient of the 2018 Nobel Prize in Economics for his work on economic modeling of the cost and benefits of climate change and climate change policy.
3) Bjorn Lomborg, visiting fellow at the Hoover Institute, President of the Copenhagen Consensus Center, whose book False Alarm was very instructive and persuasive.
Let’s be clear. This missive accepts that the world is getting warmer due to the build-up of man-made greenhouse gases, and accepts the validity of the UN’s climate models. And yet, it still comes to the conclusion that the US is engaged in terrible climate change policy! Such policy is too expensive with too little benefit!
Setting Policy Without Regard to Cost: The Paris Climate Accord and the Green New Deal
The agreement:
The Paris Climate Accord is a collection of 195 statements of what each country promises to do to reduce global greenhouse gas emissions to limit the rise in temperature to 20 degrees C (3.6 degrees F).
The promises vary widely by country. President Obama promised to cut CO2 emissions by 18% below 1990 levels by 2025. The EU promised a 40% reduction below 1990 levels by 2030. China took a different approach. It promised to reduce CO2 intensity by linking CO2 output to the size of its economy, making a promise to reduce CO2 emitted in 2030 to be 60% below the 2005 level per dollar generated by its economy.
The US has not laid out an actual plan to meet its CO2 emissions promise. We are calling the “Green New Deal” President Biden’s policies to progress President Obama’s promise, albeit without an actual formal plan to meet the goal.
Climate impact and cost of the Paris Accord
Baseline: if we do not implement a climate change policy, the global temperature by 2100 is projected to increase 7.5 degrees F above the 2020 temperature. Energy-economic models suggest that the cost of this global warming will be 2.6% of global GDP by 2100. Keep in mind that global GDP should nearly double over the 80 years to the end of the century in the absence of climate change, but will instead be reduced by 2.6% with climate change policy in place. Money not spent on climate change would be available to fund other programs that improve life such as better health to improve longevity, better education to provide for growth opportunities that lift people out of poverty, and better infrastructure to combat the effects of climate change.
The total cost of the promises in the Paris Accord is approximate $2 trillion annually. For the United States, the project cost is between $300 - $350 billion annually. It is on par with the entire expenditure on the world’s military each year. The impact of these programs carried through to 2030 is a reduction in global temperature of 0.05 degrees F. If we assume promises and investments continue to be made to the end of the century, the temperature impact would improve to 0.5 degrees F. That’s a lot of money for an unmeasurable benefit, proving CO2 reduction is a very costly and inefficient way to combat the effects of climate change.
It is estimated that to achieve the Paris Climate Accord goal of an increase of 3.6 degrees F by the end of the century, emissions would have to be cut 80 times more than the promised cuts in the Paris Accord. What's more, Countries are not fulfilling their promise in the Paris Accord. To date, not a single country is on track to fulfill its promise.
Convention of States
It is hard to imagine a worse use of government resources than spending trillions of dollars on climate programs producing an immeasurable result. A Convention of States could pave the way for an amendment for a balanced budget forcing accountability of our elected representatives to prioritize funding on programs consistent with the public will. In the process, we must educate and discuss the cost and benefits of this program in the context of other government programs. This is not happening now. American “green policy” is now item #1 on the list of government waste and abuse.
