In the News

This Friday is the deadline for public comments on the stricter vehicle efficiency standards from EPA and the Department of Transportation. The docket is likely to be overrun with statements for and against the regulation that would make cars and light trucks 30 percent more efficient in 5 years.

From an economic perspective, the social benefits of the rule outweigh the costs. The environmental, health, and energy security benefits—most especially from reducing the tailpipe emission of greenhouse gases—could more than double the estimated costs to manufacturers of installing more fuel efficiency technologies: social benefits could total over $800 billion, compared to around $400 billion in compliance costs.

Obama Administration regulators have moved forward with a climate agenda at a good clip—taking the issue from zero to sixty to make up for the lost time of the past eight years of stalling. So while the cap-and-trade bill that passed in the House of Representatives is currently stalled in the Senate, it is not true that American negotiators are going to Copenhagen empty handed.

The debate over the economics of climate change boils down to that very calculation: how much are we willing to pay today to avoid climate risks in the future? The simple fact is that as we continue to use fuels that contribute to global warming today, we place major economic burdens on our kids and grandkids tomorrow.

Experts at a recent DIVERSITAS biodiversity conference in Cape Town showcased research suggesting that a single acre of coral reef yields an average of $53,000 in annual economic benefits, concluding that worldwide reefs are worth about $172 billion annually. This eye-popping value certainly seems like it would warrant coral reef protection, particularly given the positive rate of return for investing in restoration and conservation projects.

A study released earlier this year by the Institute for Policy Integrity (IPI), a non-partisan think tank based in New York City, found the benefits of upgrading disposal sites would exceed the costs of tougher regulations by almost 10 to 1. The research focused mostly on coal ash ponds like the one that failed in Kingston, Tenn., in December. The costs for quarries to upgrade would be much lower than the costs for ponds, according Scott Holladay, an economist who researched the issue for IPI.

A recent Institute for Policy Integrity study found most expert economists agree that reducing greenhouse gas emissions can help avoid a major economic malfunction. Which policy options will produce the best results? How will an international agreement affect the economy? During today’s OnPoint, Michael Livermore, executive director of the Institute for Policy Integrity at the New York University School of Law, discusses the study and explains how its findings can be applied to the congressional climate debate.

Last week Americans for Prosperity – the group behind the campaign against the health bill this summer – launched a hot air balloon to “expose the ballooning costs of global warming hysteria”. But a survey by New York University of 289 economists who had published studies related to climate in the 25 top academic journals over the last 15 years threatens to prick it.

In a survey of 144 top climate economists released November 4, 2009 by the Institute for Policy Integrity at the New York University School of Law, 84% agreed that “the environmental effects of greenhouse gas emissions, as described by leading scientific experts, create significant risks to important sectors of the United States and global economies.” A majority stated that sectors that will be negatively affected include agriculture, fishing, forestry, insurance, and health services.

On top of the health costs, a recent study by the Institute for Policy Integrity at the New York University School of Law found that failing to deal with climate change will cost our economy an average of $27 million to $375 million every day from now until 2050.

Economists have sparred for years over what price tag to put on the societal danger of carbon dioxide emissions. Now the Obama administration is quietly struggling to reach its own conclusion.

The answer promises to weigh heavily on a slew of future regulations that directly and indirectly combat climate change.

“This has huge potential. So many decisions the government makes have an influence on greenhouse gas emissions,” said Michael Livermore, executive director of the Institute for Policy Integrity (IPI) at the New York University School of Law.