A State Global Warming Policy Could Destroy the Economy

Published February 27, 2003

There is a little-known provision in North Carolina’s “clean smokestacks” bill that could cost the state billions of dollars annually and devastate the economy.

The provision establishes a commission to make recommendations for cutting greenhouse gas emissions and combat the “problem” of global warming. In setting up the commission, North Carolina is joining a number of other states in an attempt to implement the U.N. treaty on global climate change known as the Kyoto Protocol. President Bill Clinton signed the protocol, but because of its high costs the Senate declared its opposition in a near-unanimous vote. In 2001 the Bush administration withdrew the United States as a signatory to the treaty. The treaty would have forced drastic reductions in energy usage in order to achieve the required goal of reducing carbon dioxide emissions to 7 percent below 1990 levels.

It was clear from the beginning the treaty would have a chilling effect on the nation’s economy. In a 1998 study conducted by WEFA, Inc., it was found that the treaty would increase the price of electricity by more than 86 percent and the price of gasoline by more than 50 percent. GDP would be reduced by nearly $400 billion and 4 million jobs would be lost. More than 100,000 of those jobs would be lost in North Carolina.

But what would happen if North Carolina tried to pursue the Kyoto requirements on its own? Given the influence that environmental pressure groups have with Gov. Mike Easley’s administration, this scenario is quite plausible. According to a new study by The Heartland Institute, a national free-market think tank based in Chicago, Illinois, a statewide program to reduce greenhouse gases to levels required by the U.N. treaty would cost North Carolina tens of billions of dollars a year. In particular, the study concludes that such a program would cost the average household in the state $7,249 annually and the total in higher energy costs and lost wages for consumers and businesses combined would be a devastating $22.7 billion.

In its study, The Heartland Institute looked at 37 states to determine the costs if each state pursued the Kyoto targets separately. The reason for this is that many state governments, influenced by radical environmentalists, are embracing the treaty on their own. And, it looks as though North Carolina soon may jump on the bandwagon.

The Heartland study also predicts severe consequences for North Carolina’s budget. Their study, based in part on the U.S. Energy Information Agency study cited above, concludes that the state would have to spend $552 million a year to achieve the Kyoto reductions and would lose $3.7 billion in revenues from reduced economic growth.

But isn’t all of this worth it to save the planet from the melting ice caps and rising sea levels supposedly brought on by global warming? The fact is that North Carolina could do all that the Kyoto Protocol requires and more, and it would have no perceptible effect on global climate. Any action that North Carolina could take would involve all costs and no benefits. In a prominent study by Dr. Thomas Wigley, himself an advocate of the idea that human induced global warming is occurring, it was concluded that if the Kyoto Protocol were adopted and adhered to with 100 percent compliance, the effect would be to cool the planet by an imperceptible 0.13 degrees Fahrenheit over the next 50 years. Furthermore, the best evidence suggests that global warming is not occurring. The two most accurate measures of global temperatures, satellite and weather-balloon data, show no warming for the past 24 years.

North Carolina should not adopt any policies meant to reduce carbon dioxide emissions. Carbon dioxide is not a pollutant, but a naturally occurring gas that is essential for all life on Earth. Increased levels of carbon dioxide in the atmosphere are likely to induce longer growing seasons, increased crop yields, and lower food prices. During this session, the General Assembly should revisit the “clean smokestacks” bill and repeal that portion of the legislation establishing the “greenhouse gas” commission, whose recommendations can only be harmful to the state and its citizens.

Dr. Roy Cordato is vice president for research and resident scholar of the John Locke Foundation in Raleigh.

For further information, contact Heartland Public Affairs Director Greg Lackner at 312/377-4000, 773/489-6447, email [email protected]