The head of the Congressional Budget Office testified before the Senate energy panel yesterday, stating that a cap-and-trade bill included in the House’s version of climate change legislation would slow US economic growth slightly through the year 2050.
CBO Director Douglas Elmendorf said the gross domestic product could be a quarter to three-quarters of a percent smaller in 2020 under a cap and trade bill than it would be without one. Likewise it could be 1% to 3.5% smaller than business as usual estimates for the year 2050.
For those seriously concerned about climate change, this slight constriction is likely to seem a small price to pay. In addition, Elmendorf said the CBO’s estimates don’t include benefits of reducing the effects of climate change.
However, Elmendorf’s testimony is sure to fuel the fire of opposition to climate change legislation, because it contradicts the message asserted by the White Houe and Democrats that climate change legislation will boost the economy and create green jobs.
Elmendorf said jobs would be created, but that many would also be lost from fossil fuel industries causing "some decline in employment during the transition because labor markets don’t move that fluidly," as reported by the Wall Street Journal.
But Elmendorf said ultimately the negative economic effects would be "comparitively modest.”
A pdf of his testimony is available here.
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