Blowing Smoke on State Climate Action Plans

Many states have adopted Climate Action Plans (CAPs) that limit greenhouse gases by 2020, and nearly identical plans are advancing rapidly toward approval in other states.
But according to a peer-reviewed study of the Maryland CAP by the Beacon Hill Institute at Suffolk University in Massachusetts - an economics think tank - these cookie-cutter proposals are “seriously flawed” for multiple reasons. If implemented, the plans could take other states down the same road California is already traveling. Anti-business policies that were often justified mainly on environmental grounds, have cost Californians dearly. Millions of jobs fled to lower tax neighbors  like Nevada and Arizona, the state’s 8.4 percent unemployment rate rivals Michigan’s, and political gridlock over a $40 billion budget deficit could leave California bankrupt early in 2009.

California’s carbon emissions rules are the toughest in the nation, and are often touted as a model for other states and the federal government. But Californians will soon begin paying even more for electricity, natural gas, and water, thanks to carbon taxes. These costs will supposedly be offset by a new clean-energy economy that will create “green” jobs and add $78 billion to the state economy. If that sounds familiar, it should because it’s the same scenario touted by President-elect Barack Obama for the nation.

The Beacon Hill analysis notes that Maryland generates less than half of one percent of the world’s carbon emissions, so nothing the state does will have any discernable effect on global climate. Therefore, “no measurable benefit” can be quantified. But the downsides of the Maryland CAP are all-too-concrete. For starters, the plan (and others like it) “fails to perform the most basic task of any cost-benefit analysis - quantifying costs and benefits in monetary terms so they can be directly compared.” The plan contains 42 recommendations to reduce greenhouse gas emissions by 2020, and claims it will create hundreds of thousands of new “green jobs” and a $16 billion boost to Maryland’s GDP.

The Maryland’s CAP fails to explain how all those new “green” jobs will outweigh the loss of existing jobs in industries forced to reduce output. As Beacon Hill points out, if increased conservation efforts could really save companies billions of dollars, they’d already be doing it voluntarily. The plan also fails to take into account the loss of goods and services that won’t be produced in order to meet mandatory energy reduction targets starting next year. Instead, as it does with jobs, the CAP model “counts forgone energy consumption as a benefit” – when in fact it is an energy tax. Caveat emptor.

For more information on the flaws in many CAPs - and the common organization and funding behind them - check out Climate Strategies Watch.