GAO examines Kyotos costs

by William Yeatman on April 13, 2004

in Kyoto Negotiations

At a July 2002 hearing on the Bush Administrations climate initiative, James Connaughton, Chairman of the Council on Environmental Quality (CEQ), testified that implementing the Kyoto Protocol would reduce U.S. economic output by up to $400 billion in 2010.  In contrast, a 1998 study done by President Clintons Council of Economic Advisers (CEA) found that the costs of implementing the Protocol would be $7 billion to $12 billion annually in lost output. 

The General Accounting Office has analyzed the stark difference between the two studies and concluded that there are two principal reasons for it.  First, the Bush Administrations estimate assumed that all reductions would be achieved domestically, while the Clinton Administrations estimate assumed that compliance would be largely achieved through the purchase of emissions reductions from other nations.  Second, the economic growth rate assumed by the Bush study (2.3 percent a year for 1995 through 2010) was higher than the growth rate assumed by the Clinton study (2.1 percent for the same time period), and thus forecast a higher level of emissions.  (GAO report, January 30, 2004).

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