Yale research shows it’s a risk worth taking

In May 2007, Minnesota politicians strongly supported a Fresh Energy policy to establish a cap on carbon emissions that declines over time. Later that year, Governor Pawlenty and five other Midwestern governors agreed to work together on a regionwide carbon capping plan. But even with this broad concurrence and clear momentum, the 2008 Minnesota Legislature could not agree on the basic principles of a good carbon capping program. Instead, our elected leaders were more comfortable merely asking for studies of potential economic impacts.

Minnesota’s legislators aren’t alone. Decision makers nationwide are asking the same question: How will cap-and-trade policies affect the economy? Opponents stress the uncertainty of cost, claiming these policies will stifle employment and job creation. Advocates say they will drive innovation and new technology and will be the biggest shot in the arm for the economy since America retooled itself for World War II.

Who are you going to believe?

RESEARCH TO THE RESCUE

Last year, Yale University researchers undertook a massive project to investigate the question in their project, “See for Yourself: How Reducing Greenhouse Gas Emissions Will Affect the American Economy.” They looked at numerous economic simulations under various cap-and-trade policies, and then synthesized all available models. They discovered an interesting thing: the economic impact of capping carbon depends on seven assumptions.

Seven. They range from the stability and price competitiveness of renewable fuels to the use of carbon capping program revenues. For each assumption, the likelihood ranges from “no chance” to “certainty.”

The results may surprise you. The United States could reduce global warming emissions 40 percent by 2030, and under least favorable assumptions, the economy would grow by more than 2 percent annually. Under most favorable assumptions, the economy would grow by more than 3 percent. Compare both with America’s 3 percent business-as-usual projected growth, and you’ll probably agree that saving the planet is worth the risk.

TIME TO ACT

The likelihood—from “no chance” to “certainty”—of Yale’s seven assumptions is debatable. But I’m convinced of this: American ingenuity, our history of technological progress, and our boundless capacity for innovation can solve the climate crisis without undue risk to the economy. With its project, Yale lays to rest the common argument that the cost is too uncertain. Minnesota, the Midwest, and America need action, not more studies.

In May 2007, Minnesota politicians strongly supported a Fresh Energy policy to establish a cap on carbon emissions that declines over time. Later that year, Governor Pawlenty and five other Midwestern governors agreed to work together on a regionwide carbon capping plan. But even with this broad concurrence and clear momentum, the 2008 Minnesota Legislature could not agree on the basic principles of a good carbon capping program.