When global warming legislation forces American consumers to purchase electricity from sources that are 75 percent to 887 percent more expensive than coal, we will hardly notice the difference in our wallets, columnist Paul Krugman argued in the September 25 New York Times. Sure, and the Tooth Fairy will soon come and put $500 under each of our pillows every time we brush our teeth.
While Krugman’s article is silly on its face, it does perform the public service of providing us a window into the mindset of global warming alarmism, which is fast taking its rightful place alongside such mythical creatures and end-of-the-world scare scenarios as such as Sasquatch, the Loch Ness Monster, people-snatching aliens, ancient Mayan apocalypse prophecies, and global cooling.
Before making his delusional economic claims, Krugman offers the best scientific argument he can muster: “Arctic pack ice … has now diminished to the point that shipping companies are opening up new routes through the formerly impassable seas north of Siberia.”
Really? Name those shipping companies, Paul. A single German company sent two specially outfitted ships this summer on an ice-flow dodging voyage hugging the Siberian coast. That’s it – two specially designed ships hugging the coast. This constitutes shipping companies opening up new commercial sea routes? Way to mislead your readers and distort the truth, Paul.
Oh, and Arctic pack ice this summer was more expansive than in 2008, which in turn was more expansive than in 2007. Indeed, Arctic pack ice has grown by 25 percent over the past two years. I guess you kind of forgot to include that, right Paul?
Which leads us back to Krugman’s La-La Land where paying substantially more for energy doesn’t hurt American consumers. Even President Obama, in an interview last year with the San Francisco Chronicle, acknowledged that under his cap-and-trade proposal, “Electricity rates would necessarily skyrocket.” Krugman would apparently argue that Obama is not to be trusted, as he is merely a shill for the oil and gas industry.
Obama’s prediction has substantial support from many objective economic studies. According to a study published by economics professor Gilbert Metcalf of Tufts University, the production cost of wind power is 75 percent higher than the production cost of coal, and the production cost of solar power is 570 percent to 887 percent higher than coal.
Just how much will these higher energy costs impact American consumers? According to CBS News, the Obama administration has acknowledged the average American household will have to pay an extra $1,761 every year under the Waxman-Markey global warming bill passed this summer by the U.S. House of Representatives. Obama’s Treasury Department has admitted the cost could be as high as $3,000 per household each year. And U.S. Energy Information Administration economic models predict the cost would approach $7,000 per household per year.
Krugman attempts to counter these studies – and the telling admission of President Obama – by asserting that a Congressional Budget Office (CBO) study predicts the Waxman-Markey bill will cost the average U.S. household only $160 per year.
The problem with Krugman’s assertion is that supporters of Waxman-Markey asked CBO to project Waxman-Markey costs for the year 2020, long before most of carbon dioxide cuts are required. Krugman’s use of 2020 economic predictions is no more intellectually honest than his claim that Arctic pack ice is shrinking and shipping companies are opening up Arctic trade routes.
Moreover, CBO determined that in 2020 Waxman-Markey would cost the average household nearly $1,000 per year rather than the $160 claimed by Krugman. Krugman’s logic is that Waxman-Markey supporters pledge to redistribute and create wonderful new government programs out of most of the carbon offset fees it collects, so American consumers will ultimately get most of their money back via these federal programs. By this logic, of course, none of us really pays anything in taxes, because government turns all our tax dollars into one wonderful government program or another.
Isn’t it great living in Krugman La-La Land?
James M. Taylor is senior fellow of environment policy at the Heartland Institute.