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Searching for the Source of the Myth (continued)
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The idea of an economic train wreck did not come from the DOE, so where did it come from? I have seen many studies of what would happen to the economy under strict regulation of greenhouse gas emissions, and they all come to conclusions similar to those of the DOE study and the seven private studies that the DOE reviewed at the time. None of the studies predict a wrecked economy, and nothing I can find on the White House Web site points to any such study. All I can conclude is that someone just made it up.
Should we trust all these economic studies? Do they make sense? The first thing to remember is that when we run an energy policy ourselves, we don’t have to pay OPEC to make us conserve. In the second OPEC crisis, from 1979 through 1985, not paying the OPEC premium would have saved almost half a trillion dollars. That would have put a lot of people to work. And had it been our own policy, we would have started it gradually, allowing the economy time to adjust. The enormous conservation achievements of that period would have been cheaper with a home-grown policy.
Coal emits the most CO2 per unit of energy produced and accounts for as many tons of CO2 as all transportation uses combined. But the total spent on coal in 2006 was only a quarter of 1 percent of gross domestic product (GDP). Even if it cost four times as much to burn coal cleanly or to replace it with another source of energy, all coal emissions could be eliminated for less than 1 percent of GDP. Oil is more expensive, but this only means that cutting back on oil saves more money. If the country spent an extra $900 per new car or light truck to double its mileage, that would cost us almost 1 percent of GDP. However, by the time all the old vehicles had been replaced, we would be saving that much by importing less oil, assuming a price of $80 per barrel. The net cost would decline to nothing.
Finally, as the DOE found in its analysis of the Kyoto Protocol, cutting back on oil use would reduce the world price of oil enough to have a significant impact on energy costs. Of course, this works best if nations worldwide agree to cut back. In the DOE analysis, the world price of oil dropped by 15 percent. With oil at $80 per barrel and imports as they are today, that would save another $50 billion per year. Numerous additional studies support these conclusions. (See Appendix A). All told, there is simply no reason to be frightened of a sensible energy policy.
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http://zfacts.com/p/875.html | 01/18/12 07:26 GMT
Modified: Sat, 24 May 2008 04:53:11 GMT
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