USCAP: Climate change actions won't stunt US economic growth

Dec. 3, 2009
US economic growth would not be significantly reduced through 2030 if the nation took aggressive action to address climate change, the US Climate Action Partnership said on Dec. 2.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 3 -- US economic growth would not be significantly reduced through 2030 if the nation took aggressive action to address climate change, the US Climate Action Partnership said on Dec. 2.

The group of businesses and environmental organizations said that its economic analysis estimates US gross domestic product would grow 70-71% with the adoption of climate legislation similar to its Blueprint for Legislation during that period, and 71-72% in the absence of climate policy. Royal Dutch/Shell, BP, and ConocoPhillips are members.

USCAP’s analysis used two economic models similar to ones used by the US Environmental Protection Agency and the Energy Information Administration when they reviewed House legislation passed in June.

“All of the studies, including USCAP’s analysis, show employment growing under all scenarios,” Janet Peace, vice-president of markets and business strategy at the Pew Center on Global Climate Change,” told reporters in a teleconference. “The climate policy is absolutely compatible with robust economic growth.”

Almost imperceptible
The models showed that enacting climate legislation would cause an almost imperceptible dip in domestic GDP growth through 2030, Peace said. Under a business-as-usual scenario without climate legislation, total US economic output was projected to reach $22.3 trillion by 2030. With the USCAP’s Blueprint recommendations, the domestic economy would arrive at the same point 2-4 months later, she indicated.

“Early development of offsets is essential,” said Peace. “They’re necessary for cost containment, such as emissions reductions in agriculture and forestry. Limits or delays in development of either domestic or international efforts will increase the program’s costs.”

The study also found that complementary actions to develop energy efficiency, transportation, and carbon capture and storage programs will be essential in advancing technology and lowering future energy spending.

“There is no question that we can address the climate challenge in a way that protects consumers while growing our economy,” Peace said. “While there are costs involved, they are modest and prudent investments in a cleaner, more effective future.”

‘Best solution’
“We’re very comfortable with the idea that markets will deliver the best solution,” said Jeff Hopkins, principal advisor on energy and climate strategy at Rio Tinto, a multinational mining company that belongs to USCAP.

He said Rio Tinto and BP are investors in a California power plant that will use a variety of fuels and employ CCS to enhance production at a nearby oil field. “Only a climate policy such as the one USCAP proposes will encourage the integration of various technologies,” Hopkins said.

Melissa Lavinson, senior director of federal affairs at Pacific Gas & Electric Co. said, “An industry like ours needs to know what policies are going forward because it makes long-term investment decisions. Utilities expect to spend $1.5-2 trillion, and jobs will be associated with those investments. New technologies will require new workers with new training. Understanding what the rules of the road will be especially critical.”

Contact Nick Snow at [email protected].