Economists Warn Bush Administration About the High Cost of Inaction on Global Warming

At the daily Climate Action Network (CAN) press briefing at the Montreal climate change negotiations, 25 respected American economists, including three Nobel laureates, called upon the United States to move aggressively to combat global warming. These economists, all with expertise on applying economics to environmental policy, assert that unless we act now, the price of dealing with global warming and its disruptive effects is only going to increase. The statement was delivered to President Bush and key cabinet members, as well as to every U.S. senator and member of Congress.

"It is important that greenhouse gas emissions be managed using an incentive based policy, such as a market-based approach to capping and reducing such emissions," the economists stated. "This type of strategy…assures that economic forces are directed to keeping the cost of reducing emissions as low as they can be."

The Union of Concerned Scientists (UCS) said the economists' call for action underscored that the cost of inaction on global warming will hurt the American economy and U.S. based businesses. Many major corporations, including General Electric, Wal-Mart, and DuPont, have made commitments to cut their own emissions of carbon dioxide and other heat-trapping gases. A growing number of corporate CEOs are calling for the United States to establish mandatory caps on such emissions.

"In addition to the rising cost of delay, lack of U.S. leadership is an opportunity cost to U.S. businesses and consumers," said Kevin Knobloch, President of the Union of Concerned Scientists. "An aggressive rollout of energy efficient cars and trucks, appliances, heating and cooling systems and renewable energy technologies will save businesses and consumers significant amounts of money, as well as create high-quality jobs and increase community investment."

According to the economists, as the rest of the world sets up carbon trading markets, the demand for renewable energy and associated technologies will increase. "Adding industries in the United States to the other sources of these demands will help to reinforce this process," the letter concluded.

"The U.S. should be the global leader in manufacturing and exporting clean energy technologies," said Geoff Heal, professor of public policy and corporate responsibility at Columbia Business School and lead organizer of the letter. "If we want to develop and export the energy technologies of the future, then we need federal policies that create incentives for developing and rapidly deploying that technology. A national greenhouse gas cap-and-trade system is one such incentive, and should be pursued vigorously by the president and Congress."