US climate law would hit economy, jobs - economist

08 November 2007 14:30  [Source: ICIS news]

WASHINGTON (ICIS news)--US Senate climate control legislation aimed at cutting US emissions of greenhouse gases would cause severe damage to the US economy and trigger wide scale unemployment, a leading economist told senators on Thursday.


Margo Thorning, chief economist at the American Council for Capital Formation, told the Senate Environment and Public Works Committee that greenhouse gas emission reductions targeted by the bill, S-2191, could not be achieved “without severely reducing growth in the US economy and in employment”.


The bill, titled "America's Climate Security Act of 2007," is a “cap and trade” system that would impose limits or caps on US industrial emissions of six greenhouse gases (GHG) and provide or auction emissions permits to individual companies.  It targets companies in electric power generation, transportation, chemical and other manufacturing and consumers of natural gas.


Those companies whose plants emit less greenhouse gas than permitted could sell remaining emission credits to other firms whose facilities exceed allotted maximums.


Sponsored by Senators Joseph Lieberman (Independent-Connecticut) and John Warner (Republican-Virginia), the measure is meant to reduce US emissions enough by 2030 "to avert the catastrophic impacts of global climate change," according to its authors.


However, Thorning said that the projected 18% growth in US population from 2010 to 2030 would necessarily create more energy consumption and related emissions to reach some 7,783m tonnes of carbon dioxide (CO2) equivalent by 2030.  S-2191 would mandate that US emissions of greenhouse gases (GHG) be cut to about 3,472 tonnes by 2030.


“Sharp cutbacks in US energy use would be necessary to close the 55% gap (4,311 tonnes of CO2 equivalent) between projected emissions and the S-2191 target,” Thorning said.


She said that a mandatory cap and trade emissions programme that came into force among the 25 nations of the European Union in January 2005 has not worked.  “Projections show that the major EU countries will be 7% above 1990 levels of emissions in 2010 instead of 8% below,” she said.


The EU Emission Trading Scheme (ETS) was put in force as part of the EU’s participation in the 1997 Kyoto climate control treaty, to which the US is not a signatory.


Thorning said the US could only reduce its greenhouse gas emissions and maintain economic growth and employment by improving energy efficiency, advancing carbon capture technology and renewable fuels and with much broader use of nuclear power.


Senator Barbara Boxer (Democrat-California), chairwoman of the committee, has been quoted as saying she wants to complete committee action on S-2191 before she journeys to Bali, Indonesia, for the UN climate control conference in early December.

By: Joe Kamalick
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