Global Warming Report Says Remedies Affordable

The White House released an optimistic economic analysis Friday on the cost of addressing global warming that assumes U.S. companies will rely heavily on buying pollution credits abroad and make relatively small reductions themselves.

The analysis, produced by the White House Council of Economic Advisors, said meeting the goals of the climate agreement reached in Kyoto, Japan, would cost an average household $70 to $110 a year more for energy.

Similar estimates have been given by administration officials in testimony before Congress, although business groups have cited other studies that put the cost much higher.

The White House analysis, however, relies on an economic model that assumes 75% of U.S. reductions in heat-trapping greenhouse gases would come from buying pollution credits from abroad. About one-fourth would be actual U.S. reductions, mostly cuts in carbon dioxide from burning fossil fuels.

The heavy reliance on so-called emission trading brought instant criticism from environmental groups.

“We’re disappointed that the economic analysis fails to envision real emission cuts at home and relies on buying the right to pollute from other countries,” said Jennifer Morgan of the World Wildlife Fund.

Alden Meyer of the Union of Concerned Scientists accused the administration of “dropping the ball on emission cuts in the United States” if it follows through on relying so heavily on credits purchased from abroad.

Janet Yellen, head of the White House Council of Economic Advisors, cautioned that the economic analysis “is by no means an assessment of what we would do at home” in terms of greenhouse reductions. She said the analysis assumes only “a rock-bottom floor” of domestic activity to cut greenhouse gases and, in fact, larger domestic emission cuts likely will be achieved at modest cost.

For example, said Yellen, increased competition in the electric industry, expanded tree planting to absorb carbon dioxide, energy technology advancements and more voluntary actions by U.S. industries would increase domestic emission cuts.