• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Krugman Wrong on Cap and Trade Costs

    Paul Krugman blasted opponents of cap and trade and The Heritage Foundation in his New York Times column today, saying:

    So where do the apocalyptic warnings about the cost of climate-change policy come from? Are the opponents of cap-and-trade relying on different studies that reach fundamentally different conclusions? No, not really. It’s true that last spring the Heritage Foundation put out a report claiming that Waxman-Markey would lead to huge job losses, but the study seems to have been so obviously absurd that I’ve hardly seen anyone cite it.

    Krugman goes as far as saying a Treasury Department study does not exist even though the Competitive Enterprise Institute’s Chris Horner uncovered it using the Freedom of Information Act.

    And if Krugman hasn’t seen anyone cite our numbers perhaps he should check: USA Today, The Wall Street Journal, The Washington Post, CNN, Roll Call, The Washington Times, The Detroit News, The National Review, The Examiner, Congressional Quarterly (9/18/09), The Chicago Sun Times, CBSNews.com, USAgNet, Denver Post, McClatchy-Tribune, Chattanooga Times-Free Press, Debeque Tribune Herald, Investors Business Daily, Greenville SC News, Richmond Times Dispatch, Charleston Post & Courier, Manchester Union Leader, Seattle Times, International Business Times, Florida Times-Union, Omaha World-Herald, Cincinnati Inquirer, The Hill, Grand Rapids Press (7/12/09), The Cleveland Plain Dealer, The Daily Independent, The Tennessean, or the National Journal – to name a few on a much more exhaustive list.

    Or he should ask one of these Members of Congress who have cited our data in floor speeches or hearings: Rep. Latta (OH)7/21/2009, Rep. Lucas (KY) 6/26/2009, Rep. Pence (IN) 6/26/2009, Rep. Olson (TX) 6/26/2009, Rep. Burton (IN)6/26/2009, Rep. Calvert (CA) 6/26/2009, Rep. Sessions (TX) 6/26/2009, Rep. Mica (FL) 6/26/2009, Rep. Foxx (NC) 6/25/2009, Rep. Tiahrt (KS) 6/24/2009, Sen. Alexander (TN) 6/18/2009, Rep. Davis (KY) 6/17/2009, Rep. Latta (OH) 6/16/2009, Rep. Goodlatte (VA) 6/11/2009, Sen. Barrasso (WY) 6/11/2009, Sen. Vitter (LA) 6/4/2009, Rep. Latta (OH) 6/3/2009, Rep. Pence (IN) 6/3/2009, Rep. Latta (OH) 5/19/2009, Rep. Latta (OH) 5/13/2009, Rep. Pence (IN) 4/21/2009, Rep. Pitts (PA) 4/21/2009, or Rep. Blackburn (TN) 3/17/2009.  And debate hasn’t even begun in the Senate.

    Krugman admits “Saving the planet won’t come free” but he also pushes the “it will only cost a postage stamp per day” rhetoric. Interestingly, at a Heritage event this week not one presenter out of six (including three government agencies) projected a net increases in employment from cap and trade. The entire debate was over the magnitude of income, consumption and job losses. And we’re not the only ones projecting devastating economic impacts.

    The Brookings Institution projects that an additional 8 percent cut in carbon dioxide emissions increases consumption costs 45 percent. GDP in the United States would be lower by 2.5 percent in 2050, and unemployment would be 0.5 percent higher (1.7 million fewer jobs) in the first decade below the baseline or without cap and trade. The total allowance revenue (tax revenue) generated by 2050 would be $9 trillion.

    The National Black Chamber of Commerce found the following adverse effects from Waxman-Markey: In 2015, GDP would be 1 percent ($170 billon) below the “no cap-and-trade bill” baseline. In 2030, GDP will be 1.3 percent ($350 billon) below the baseline, and by 2050 the study projects a reduction in GDP of 1.5 percent ($730 billion). The study also projects higher job losses of 2.3-2.7 million jobs in each year of the policy through 2030—even after accounting for “green job” creation.

    The National Association of Manufacturers (NAM) and the American Council for Capital Formation (ACCF) study found that by 2030, U.S. jobs decline by 1.8 million under the low cost case and by 2.4 million under the high cost case. Moreover, “Higher energy prices would have ripple impacts on prices throughout the economy and would impose a financial cost on households of $118 to $250 by 2020 and $730 to $1,248 by 2030.”

    Krugman, instead, points to the Congressional Budget Office study, which is not a comprehensive study of the true costs of the Waxman-Markey cap and trade bill.

    And even if, by some divine miracle, cap and trade did cost a postage stamp per day, Climatologist Chip Knappenberger projected that the Waxman-Markey cap-and-trade legislation would moderate temperatures by only five hundredths of a degree in 2050 and no more than two-tenths of a degree Celsius at the end of the century. We’d rather have a stamp.

    Posted in Energy [slideshow_deploy]

    29 Responses to Krugman Wrong on Cap and Trade Costs

    1. Richard, TX says:

      That's the problem with liberals and Cap and Trade, it's all emotional. There are no facts that they can point to that shows anything but more taxes and fewer jobs for no benefit.

    2. John, Gilberts Illin says:

      Great post, Nick Loris. It's good to see that Heritage isn't afraid to have you use tough language.

    3. Bill San Antonio TX says:

      It's utterly amazing. These people jump from one job to another (always being forthright and truthful, eh)? Way to go NY Times; I know Paul Krugman will "fit right in".

    4. Pingback: » Financial News Update – 09/25/09 NoisyRoom.net: Where liberty dwells, there is my country…

    5. Pingback: Prayer, News and Action » Uncategorized » If You’re Paul Krugman, It’s Easy Lying About Cap and Trade

    6. Pingback: Friday Night Link Dump: Global Climate Cooling Warming Change We're All Gonna Die Everybody Panic And Give Al Gore Money - Medary.com

    7. Whicket Williams Kin says:

      Yes it is the cumulation of years of conditioning and propaganda, to pull the greatest Con in history on the whole world.

    8. Pingback: Why Are We Still Talking About Cap and Trade? - AIP Blog - American Issues Project

    9. Brett, Albany, NY says:

      Oh, but that's not the point! It's not about jobs or tax hikes or energy costs or stagflation or special interest payoffs or rational, real solutions or any of that stuff!

      …it's about "good intentions"…the intentions of the looters who, by the heavy hand of government, must force us to do what we're just too blinded by capitalism and evil self-interest to understand.

    10. Nutmeg State Conserv says:

      Stop arguing the "cost" of this disaster. THERE IS NO GLOBAL WARMING! It is just another scheme by a socialist government and a fascist President to steal as much of our money and liberty as possible and put a final nail in the coffin of our economy.
      http://www.drroyspencer.com/ http://www.climatedepot.com/
      -NSC
      http://nutmeg-state-conservative.blogspot.com/

    11. Bill, CO says:

      Krugman presented a very loose argument, hoping his graph would help to convince people of his article's legitimacy. Thank you for pointing out the flaws. We must continue to fight this disastrous cap and trade legislation. Write your Senators at http://tiny.cc/pxIgi.

    12. kristine, NY says:

      Just another reason to put the Times out of business.

    13. Brad S,, Detroit, MI says:

      Paul Krugman must be heavily invested in Goldman-Sachs.

      (They will make a fortune making commissions on selling carbon credits.)

      He is a joke. Probably even funnier than that comedian Al Gore.

    14. Jean Weingartner,Fl says:

      The Green thing about Global Warming is their new god.But they are all hypocrites and THE ONE is not god if he was as they believe there would be peace on earth everywhere and he could fix what is wrong with temperature right.GET OFF THE DRUGS krugman.Your as looney as the rest of the enviormentailist wacos.Al Gore comes to mind it is like the healthcare death bill follow the money.

    15. Ken St Louis says:

      Cap & Trade isn't about trade, or anything else! Cap & Trade is just another way to put a tax on the American people!The socialist/democratic party is all about raising taxes, redistribution, ect. Remember, Obuma said he was going to "SHARE THE WEALTH" which is just not very fancy talk for taking from productive people, and giving it to non productive people! I think its always been referred to as buying votes with OPM (other peoples money)

    16. Bob, Portland, OR says:

      The political proponents of Cap and Trade are using this hoax to ultimately gain control of all energy sources in the US and possibly elsewhere.

      But not for the benefit of the citizens.

      At the right moment, our politicians will control, or have access to all of the profits of the natural resources in the United States.

      I know this sounds a bit conspiritorial, but it does explain why the left has stopped most of the domestic oil production and cut off the coal industry all together.

      They have been patiently waiting.

      The only reason for hoarding our natural resources is to wait for a significant energy or worldwide crises, and then nationalize both. Rep Waters already said it.

      Then, the cash, profits, etc belong to our politicians, and I mean literally. Our politicians will be a new breed of shareholders. Unconstitutional you say? I think you all know the answer to that question.

      This will be the largest cash grab in the history of our country, maybe the world.

      Cap & Trade, no, it really should be called Hoard and Cash In.

    17. Susan Zarowny, Detro says:

      the Democrats or too lazy to learn a skill, produce anything or run a business. So they rather steal income (AKA Tax) from honest working people. Cap and trade will not save the planet( the planet is fine any way) and goverment's plan for health care will destroy our health system. These plans from the dems are smoke screens so that they can steal from the americans and give to themselves.

    18. Normca says:

      Come on – give Al Gore more money. After all – he was almost the president of the United states, who wrote Obama's UN speech lines about the farce of our life time. They continue to pick and chose which expert to listen to on Global Cooling [oh I mean Warming]. What do the health insurance bills, Cap and Trade, Bank and car take overs have in common ? Hugo Barrack Huessen Obama.

    19. Bill, Kansas City, M says:

      Krugman is just following the example of his leader, Obama. Obama talks about energy independence, but hasn't taken any steps to achieve that goal, except to help Brazil acheive energy independence. He gave them $2 billion to do off-shore drilling, money that should have been used here to explore off-shore drilling.

      Obama wants to do Cap and Trade in the U.S., to help the environment, so why give money to Brazil so they can explore for fossil fuels? Seems a little hypocritical to me, since according to him, all countries must limit their greenhouse emmissions. Once again, he means the U.S. must limit its greenhouse emissions, not anyone else.

      He also gives money to a car maker in Finland to help them produce a more energy effecient vehicle. A vehicle that is going to cost $89,000. Why not spend that here in the U.S. to make more energy effecient cars, and cars we afford? Or better yet, why not give that money back to who it belongs, the American people?

      Now, his State Department wants to give $400,000 to the Qaddafi Foundation. A foundation started by a man that supports terrorists and terrorism. This while we are fighting a war on terrorism in Afganistan.

    20. Buck from Greenville says:

      I have saved teh Paul Krugman commentary from the Dayton Daily News Saturday 9/26/2009 edition. Why? to write a reply to vent, knowing that it would not be printed by this Liberal daily. Your piece about Krugman helped my process of relaxing. There are two items that I wish you had included: 1. man made CO2 is insignificant regarding impact on climate – Why accept the lie? and 2. the United Nations Intergovernmental Committee for Climate Change has a single function and that is to eliminate capitalism.

      Buck

    21. Patricia, Ohio says:

      I continue to be in awe of the selective ignorance with which "journalists" such as Krugman report in order to go to the front of the class to collect their cookie for showing their blind support of this administration. I look to the answer of 2 questions when the minions speak ~ how much will this cost us and MOST important…WHO is getting the kickback?! Overall, as we watch the payback being delivered for the campaign support of Obama, it runs so much deeper than this. Being strategically pummeled with issues such as cap & trade, health care, national security, etc. [all just within the first 9 months] ~ we need to become active in doing all we can to preserve this great nation as it was founded and to protect the Constitution. We do best when we remain unique in the "global" scheme of things. Just my opinion.

    22. Lynn B. DeSpain says:

      If you are a lie, you know Paul Krugman. He is your example!

      Hozro

    23. Leon, Durango, CO says:

      "Let's run another American Industry into the ground!" That's Cap And Trade, how we killed the energy sector in America (notice that nobody else on Earth is stupid enough to do it.) There is no global warming, Big Green Al is a traitor, plain and simple. So then it's kill the Mining, Agriculture, Steel, Lumber, Construction industries. While we are at it, let's destroy the American medical industry. Now somebody remind me, by what constitutional authority does the government destroy it's own economy?

    24. Bob says:

      Krugman needs his bailout so he keeps spewing out the propaganda

    25. Ben C, Ann Arbor says:

      Its not about weather, its about tax revenue – pure and simple. Visit the website Climate Depot to read a very intersting discussion about "global warming." The evidence is overwhelming that it is NOT a settled science. It is a trumped up emotional "sky is falling" mentality that has captured the imagination of the public and revenue enhancment tenacles of government.

    26. Jerry from Chicago says:

      So, Mr. Krugman writes for the N.Y. Times, now there is an objective newspaper.

      $5.00 will get you $10.00 that Mr. Krugman owns stock in Al Gore's automotive company, Fisker Automotive. I was reading in NewsMax.com this morning that the federal goverment has given Fisker Automotive a $529,000,000 loan so they can make "hybred" sportscars – to be sold in Finland.

      And here we thought that Mr. Obama was only running two car companies, GM and Chrysler. NOt bad for a guy who doesn't want to run auto mobile companies.

      Like Nancy Pelosi, Mr. Krugman is out to "save the planet", not just the whales, or the spotted owl, or the Delta Smelt, but nothing less than the whole planet – and for only the price of a stamp per day. Now there is a man with a plan. And what a bargain. There is something almost Don Quixote-like about Mr. Krugman, tilting against stubborn disbelievers in America, along with his faithful companion Sancho (Gore) Panza.

    27. David W. Wynne, Colu says:

      Clearly, Krugman has a personal and a political agenda that go beyond the facts of Cap and Trade. For Krugman the end justifies the means and unfortunately, the media is giving him the attention he needs to accomplish his goal.

    28. Conservative United says:

      The bigger question is what the next Environmental "The sky is falling" Liberal Left Wing Cause??? We know it coming!!! Anyone Remember "Acid Rain". What ever happened to that???

    29. Brett, Albany, NY says:

      I hear "Acid Rain" isn't polling real well these days…

      Yeah, apparently 35 polling groups studied the issue and "choice" and "competition" couldn't logically be inserted into the public debate surrounding the last Acid Rain Prevention Bill…

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×