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Cost of emission caps questioned

Sam Eaton Apr 21, 2008


Lisa Napoli: A report out today says capping greenhouse gas emissions may not be as hard on the U.S. economy as critics are claiming. From the Marketplace Sustainability Desk, Sam Eaton explains.

Sam Eaton: The Environmental Defense Fund calls its report the broadest economic assessment to date on cutting greenhouse gas emissions in the U.S. The environmental group combined the findings of different models, ranging from the Department of Energy to MIT, and what it found was that the cost of setting up a cap-and-trade program to prevent the worst effects of climate change really isn’t that high. Nat Keohane authored the report.

Nat Keohane: If you bring this down to the household level and you look at the projections on consumption, these models say the overall cost of capping greenhouse gases for the average American family is going to be less than a penny per dollar of income over the next two decades.

Keohane says critics make the mistake of thinking households will consume the same amount of energy no matter how much it costs. The more realistic scenario, he says, is that households will cut their energy use or install more efficient devices if prices rise, adding just a few extra dollars a month onto their electricity bills.

I’m Sam Eaton for Marketplace.

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