.
Whether our government tries to reduce our greenhouse gases through trading schemes or taxes, the result is higher energy costs for all Americans. In 1998, Bill Clinton’s Department of Energy examined the effects on the U.S. economy if we were to ratify and comply with the Kyoto Protocol. It wasn’t a pretty picture [9].
First, the DOE made clear their assumption — necessary to keep the costs as “low” as they did — that we would be using less electricity in 2010 than we were in 1998. They predicted an electricity use reduction of 4 percent to 17 percent. This is not because we all would become more conscientious about shutting off lights, but because we couldn’t afford to use electricity as much. This naturally ignores our increased energy use from technological developments [10]. The report predicts electricity rates increasing by at least 20 percent and maybe even 80 percent over any non-Kyoto-related increases.
Electricity would be so much more expensive because Kyoto would force us to give up coal (which is domestically abundant and relatively cheap) and use more expensive fuels, increasingly imported as well, such as natural gas, to generate our electricity…
In Kyoto’s America we would cut our electricity use even more than the predicted 17 percent except that alternatives for heating our homes would be even worse. Natural gas prices would go up at least 25 percent or they could double — and that’s the beginning. And how about that pioneering UK and their similarly dropping coal in the “dash-to-gas”? Unlike our coal, their gas is now running out, stranding them with energy price spikes and threatened energy shortages.
Gasoline prices would increase between 11 percent and 53 percent, on top of any price hikes future wars or Gulf hurricanes might cause. This, of course, would drive up costs of all goods shipped by truck — which is basically everything (the study estimates a 19 percent acceleration of inflation). You would not stop driving, however, as even Europe at $7.00 per gallon has proved. Instead, certain trips would be avoided, but, as intended, many folks would sacrifice their bigger (read: safer) cars for little ones, and significant choices would be imposed involving transport, work, and living. This is all to show that a meaningless “first step” involves sacrifice of convenience, safety, and quality of life. This is not, as Al Gore wants you to believe, a simple matter of pedaling your Schwinn to work once a week and switching out some lightbulbs.
The effect of Kyoto on the price of consumer goods would be mitigated by the fact that China, Mexico, and India — in fact, except for Canada and tiny New Zealand, the entire non-European world — are not bound by Kyoto’s reductions, and thus would not experience higher manufacturing costs. That is, U.S. manufacturing would be offshored even quicker, and we would become even better customers of the Chinese, except that we would have lower incomes to spend on their goods. If we have fewer steel mills here and more steel mills there, this provides no reduction in CO2.
Kyoto, this Energy Department study says, would reduce our Gross Domestic Product by at least $77 billion (in 1998 terms, or $89 billion in 2005 terms) and by as much as $283 billion ($328 billion in 2005 dollars). That means our economy would be poorer by about $1,100 per person per year.
A similar 2000 study by the DOE concluded that the average family’s energy prices could be 18 percent higher had we ratified Kyoto. Businesses could be paying 30 percent more, and industry would be 19 percent higher. Those higher costs to business and industry, of course, would largely be passed on to the consumer — you.
[9] Energy Information Agency, “What Does the Kyoto Protocol Mean to U.S. Energy Markets and the Economy,” U.S. Department of Energy, http://www.eia.doe.gov/oiaf/kyoto/market.html .
[10] Peter Huber and Mark Mills, “Got a computer? More power to you,” Wall Street Journal, September 7, 2000. http://www.manhattan-institute.org/html/_wsj-got_a_comp.htm .
Christopher C. Horner
Chapter Eleven, “The Cost of the Alarmist Agenda”
The Politically Incorrect Guide to Global Warming and Environmentalism
