The U.S. Chamber of Commerce describes themselves this way on their website:
As the voice of business, the Chamber’s core purpose is to fight for free enterprise before Congress, the White House, regulatory agencies, the courts, the court of public opinion, and governments around the world.
But when it comes to climate and energy legislation, it seems their core purpose is to fight Congress, the White House, regulatory agencies, the courts, the court of public opinion and governments around the world from getting anything done. With such obstructionism in mind, they commissioned a report from CRA, a global consulting firm, on the supposed impact on the economy of the climate provision in the Obama administration’s 2010 budget proposal.
It’s interesting that they note upfront that the methodology used was requested by the Coalition for Affordable American Energy (CAAE). Who are these folks? An industry trade group started by and made up of members of the U.S. Chamber of Commerce. It’s a great name if they actually cared about affordable American energy (more about assessing real energy affordability below) and not just maintaining the energy status quo.
Not surprising of a study commissioned by such a group, the report finds that a cap on carbon will result in increased energy costs, loss of jobs, decreased consumer purchasing power and falling GDP. If you believe their study, it sounds pretty horrific.
Fortunately, Dr. Laurie Johnson of the Natural Resources Defense Council (NRDC), has taken apart their argument for us and made it clear that rather than fear a carbon cap, we should fear biased studies by industry trade groups. Johnson starts with the GDP question:
Top Line Question: How much larger (than 2008) does this model predict GDP will be in 2030 under an emissions cap (do not accept “how much less GDP is relative to no policy” answers)?
A: The study deceptively reports only differences in GDP growth, hiding the fact that GDP grows 72% under the cap by 2030 (more exactly, 72.06% under the cap, and 72.26% without the cap). Nowhere in the report will you find how much GDP actually grows.
In essence, the study is not just fudging the numbers, their ignoring them completely so that they can show it as a net loss to GDP. Now it’s been a while since I took economics, but I’m pretty sure that’s a major flaw in methodology.
We’ve already heard the Republican talking point, which the study repeats, that a cap on carbon will cost thousands per household. But, as Johnson points out, their numbers are derived using a number of faulty assumptions: 1) taking the sum of the value of emissions permits and dividing it by the number of US households; 2) assuming that the money vanishes completely from the US economy (rather than, as the Obama plan lays out, returning allowance value in the form of an income tax credit, clean energy investments and household rebates); 3) ignoring the competitive advantage that government subsidies (i.e. tax payer dollars) have given to fossil fuels over renewables; and 4) Ignoring consumer savings from energy efficiency improvements. By ignoring such savings, they ignore some very recent history in California where the economy grew faster than other states while holding its energy usage steady through efficiency measures.
Instead of taking into account all of the factors, they purposely ignore them in order to come up with a per household cost in 2030 that is 12.5 times higher than the EPA’s numbers.
The net job loss finding in the study is one that is sure to scare people and peak media interest, particularly given the sluggish economy. In fact, Fox News and other media outlets were recently excited by a Spanish study that showed that for every job created in the green economy, there was a loss of 2.2 jobs. Too bad most of them forgot to mention that the study author is part of an organization receiving funding from ExxonMobil. The study was also widely criticized, including by the Spanish Minister of Innovation, Enterprise and Employment for the Navarre region who saw a 183% increase in employment in renewables and a reduction in total unemployment in the region.
In the case of the US Chamber study, Johnson points out that the net job loss finding ignores some basic information; a growth in GDP, the net job gain from past environmental regulation and the job intensive nature (3 to 1) of clean energy and efficiency.
The list that Johnson finds of erroneous data goes on and on. It includes allowance prices that are much higher than the EPAs and ignoring measures like efficiency incentives and offsets that might reduce those costs.
Perhaps most important, as most of these studies showing the downside to action on climate change do, they ignore the costs of inaction. They ignore the cost of property and infrastructure losses due to rising sea levels. They ignore the cost of more frequent and intense hurricanes, fires and droughts. They ignore the costs in national security as people are displaced through droughts and loss of arable land, and more wars are fought as a result. They ignore the rising costs of food as arable land is lost. They ignore the health costs of increased incidence of disease that come with increased pollution and decreased access to fresh water. They ignore the loss of ecosystems and species that, in a very selfish way, provide us critical components for things like medical research.
The good news is that not everyone, including Chamber members, is buying it. Politico reports that in recent days, the Chamber has come under fire from some of its own members, like Nike and Johnson & Johnson:
In a letter to the Chamber, Johnson & Johnson has asked the Chamber to refrain from making comments on climate change unless they “reflect the full range of views, especially those of Chamber members advocating for congressional action.”
Nike spokeswoman Anne Meyers said her company has also been “vocal” with the Chamber’s leaders “about wanting them to take a more progressive stance on the issue of climate change.”
And the NRDC has done a great job looking at Chamber membership, and which members views are being reflected in the Chamber’s opposition to climate legislation:
NRDC took a look at the Chamber’s board of directors and their public positions on global warming and gee, what we found… it turns out that the staff of the U.S. Chamber appears to be projecting the views held by a tiny sliver of its board of directors – just four out of 122 members on the board.
Clearly, outside review of policy initiatives is important. But it is disingenuous at best, and dangerous at worst, to levy criticism that is knowingly biased and ignores basic methodology. There is a world of difference between looking at something with a critical eye and looking at something in order to create self-serving criticism of it. This is particularly so when that false criticism serves a very few powerful interests while putting the rest at risk.