by Michael Noble, executive director, Fresh Energy

As Congress and the Minnesota legislators consider policies to limit and lower global warming pollutants, the question always arises whether these “carbon capping” policies will be good or bad for the economy.

Opponents of legislation that limits and lowers global warming emissions always stress the uncertainty of cost. Advocates of capping carbon pollution say that it will drive innovation and new technology and will be the biggest shot in the arm for the economy since America retooled itself for WWII.

Who’s really telling the truth?

This week, Yale University released a website–See for Yourself–that allows you to do your own analysis with a few clicks of the mouse. That’s crazy, you say, how could that work?

Well, it turns out that Yale looked at the various economic simulations of the future economy under various “cap and trade” policies with the range of macro-economic models that are in use. Yale did a meta-analysis synthesizing the available models, and found out that remarkably few assumptions make all the difference.

And you know what, whether it hurts or helps the economy depends on those very few assumptions. What assumptions do you have? Using your assumptions, will economic impacts of big CO2 reductions be positive or negative? Is the cost or the benefit a little or a lot?

Plugging in my own assumptions, I found that instead of the economy growing at 3 percent every year between now and 2030, it grew a little less quickly, essentially losing 3 months of normal growth over a 22 year period. Heck, and we get to save the world in exchange? That seems like a bargain to me.

So go ahead, see for yourself.

This entry was posted on Friday, March 14th, 2008 at 2:27 pm by Fresh Energy and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.