Regarding the Economics of Environmentalism, A Response to CAP’s Brad Johnson

by William Yeatman on March 20, 2009

Over at the Center for American Progress, Brad Johnson, my sometimes interlocutor, takes issue with a recent Gallup poll for giving a “false choice between environmental protection and economic growth.” The subject of Johnson’s analysis is a report on the Gallup website that says,

“For the first time in Gallup’s 25-year history of asking Americans about the trade-off between environmental protection and economic growth, a majority of Americans say economic growth should be given the priority”

Mr. Johnson asserts that the Gallup’s poll is flawed because the question is inaccurate. According to Mr. Johnson, there is no trade-off between economic growth and environmental protection. We can have our cake and eat it, too, implies Mr. Johnson, and he cites two studies to prove his point.

His evidence, however, is far from convincing.

He first notes a UC-Berkeley study that claims “California’s Green Policies Have Created 1.5 Million Jobs and Added $45 Billion to The Economy.”

Yet the results of this study have been contested by many knowledgeable sources, among them the Pacific Research Institute’s Tom Tanton, who formerly served on the California Energy Commission, as well as Dr. David Kreutzer, an economist at the Heritage Foundation.

Tanton and Kreutzer are colleagues and friends of CEI, so some readers might mistakenly fault their excellent work on account of the ideological affinities of the organizations for which they work.

But if you are inclined to discount these studies, then you must also discard Mr. Johnson’s second piece of evidence, “A National Green Economy Creates Millions of New Jobs,” which was authored by Greenpeace International.

In any case, the most damning indictment of the UC-Berkeley study is the fact that its author, Professor David Roland-Holst, ran one of the two models used in an analysis commissioned by the California Air Resources Board to measure the economic impact of AB 32, California’s 2006 global warming law. The CARB study concluded that reducing greenhouse gas emissions about 20% by 2020 would increase economic growth in the Golden State. A non-partisan peer-review promptly ripped the study to pieces for being wrong and politically motivated.

Fighting the supposed problem of “global warming” might or might not be a good idea. After all, it hasn’t warmed in almost a decade, despite a steady increase in global greenhouse gas emissions. The much-vaunted “scientific consensus” failed to predict steady global temperatures, and they can’t explain it, either.

So it seems there is some uncertainty on global warming. What is certain, however, is that reducing emissions also reduces economic growth, by making energy more expensive.

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