Report argues US cap-and-trade would be affordable

A week after the US administration condemned carbon emissions legislation an environmental lobby group has released figures suggesting that the cost of a cap and trade mandate would be negligible to the country's economy.

In its report, What Will it Cost to Protect Ourselves From Global Warming? the Environmental Defense Fund argues that even the most ambitious emission reduction scenario analysed would cost the average US household less than a penny on the dollar as a percentage of total household budget between now and 2030.

"By comparison, more than three cents of every dollar already goes to insurance; nearly four cents goes to national defence; and 10 cents goes to Social Security," the report says.

The study evaluated five economic models addressing a variety of climate change mitigation scenarios, and found that the median impact on the growth of the US economy when all of them were considered amounts to 0.03 per cent between now and 2030.

Currently, the US economy's GDP is estimated to reach $26 trillion in January 2030, said the report, but implementing recommended climate legislation would delay reaching that milestone until just April of the same year.

"If we started in 2005, we would have had to globally reduce emissions by 1.3 per cent [a year] to be safe," said EDF spokesman Tony Kreindler. The necessary annual reduction to achieve a 50 per cent chance of avoiding a global temperature increase of two degrees centigrade jumps to 1.8 per cent in 2010, 2.4 per cent in 2015, and by 6.1 per cent in 2030, he added. "That might not sound like a huge number, but 5.7 per cent of global emissions equates to the entire US power sector being shut down. And we would have to make that reduction not just for one year, but every year."

The study will provide will add to the debate surrounding the 2007 Climate Security Act, which was proposed last year by senators Lieberman and Warner and calls for the introduction of a carbon cap-and-trade that would see US emissions cut by 62 per cent by 2050.

Environmentalists have welcomed the moves, but critics have argued it would be too costly and would penalise poor families. President George W Bush has repeatedly signaled that he would block the legislation if it is approved by the Senate and the House of Represenatatives and last week gave a speech in which he insisted binding legislation was the "wrong way" to address climate change.

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