Krugman: Climate Legislation Won't Cost An Arm And A Leg

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While most people seem to have forgotten we even have a climate bill to debate, Paul Krugman is not one of them. In anticipation of next year’s debate on the economics of cap and trade, Krugman pens a column saying “The claim that climate legislation will kill the economy deserves the same disdain as the claim that global warming is a hoax.”

NYT: How do we know this? First, the evidence suggests that we’re wasting a lot of energy right now. That is, we’re burning large amounts of coal, oil and gas in ways that don’t actually enhance our standard of living — a phenomenon known in the research literature as the “energy-efficiency gap.” The existence of this gap suggests that policies promoting energy conservation could, up to a point, actually make consumers richer.

Second, the best available economic analyses suggest that even deep cuts in greenhouse gas emissions would impose only modest costs on the average family. Earlier this month, the Congressional Budget Office released an analysis of the effects of Waxman-Markey, concluding that in 2020 the bill would cost the average family only $160 a year, or 0.2 per cent of income. That’s roughly the cost of a postage stamp a day.

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