Carbon pricing doesn’t harm the economy—economists and investors

agree—their links are exaggerated

Dotson and Bovarnick 6-29
Greg Dotson (Vice President for Energy Policy at the Center for American Progress) and Ben Bovarnick (Research Assistant with the
Energy Policy team at the Center). “Carbon Pricing in a Fiscal Context.” Center for American Progress. June 29th, 2016.
https://cdn.americanprogress.org/wp-content/uploads/2016/06/28144132/CarbonPriceFiscal-brief.pdf

Top economic advisers to Democratic and Republican presidents have expressed their
support for putting a price on carbon dioxide emissions, describing this as an effec - tive and efficient
approach for both reducing pollution and encouraging the adoption of cleaner sources of energy. 1 However, past policy
proposals have faced concerted opposition, and opponents of carbon pricing have
argued that such policies “would devastate our economy,” 2 have “a huge impact” on
states, 3 and “wreak major economic damage.” 4 One pressure group, Americans for Prosperity, has
convinced hundreds of policymakers to take a pledge opposing legislation to establish a so-called “climate tax” because of the burden
of higher taxes. 5 These predictions of disaster are exaggerated and are often
detached from any specific policy detail. For example, many predictions imply
that pricing carbon would have a disastrous effect on the economy, regardless of the
amount of value assigned to each ton of pollution; the sources to which the pricing
policy applies; the timeline on which the policy is established; the use of any collected
revenue; and the ability to adjust or reduce less desirable taxes due to the increased
revenue collected. A policy that prices carbon can be crafted in any number of ways—with a wide range of potential effects.
Depending on the policy details selected, a price on carbon could either trigger rapid transitions in the energy sector or none at all. It
could also raise significant revenue for the federal government or, alternatively, raise none at all. Indeed, during a recent debate in
the House of Representatives regarding a resolution denouncing the concept of a carbon tax, Rep. Steve Scalise (R-LA) said a carbon
tax would have a “devastat - ing impact” on the U.S. economy and would cost the U.S. “more than a million jobs.” 6 Rep. Doug
LaMalfa (R-CA) called a carbon tax a “job-killing scheme.” 7 However, the House resolution in ques - tion contained no specific
policy details on which to base these harsh critiques. 8 These policy specifications matter a great
deal. Increasingly, as governments develop and adopt carbon pricing policies, they are
finding acceptable approaches that internalize the costs of pollution. In fact, carbon
pollution is already priced in a significant portion of the world without
yielding dramatic harm to national economies. In total, about 40 national jurisdictions and
over 20 cities, states, and regions on five continents—representing almost one-quarter of global greenhouse gas emissions—have
placed a price on carbon. 9 In 2014, 25 percent of the U.S. population lived in a jurisdiction where carbon pollution is currently
priced and where nearly 30 percent of the country’s economic activity took place. 10 The
price on carbon in
California is the highest of any state in the country at almost $13 per ton of carbon
dioxide equivalent, and yet the California economy is projected to grow at a faster pace
than the rest of the United States over the next two years. 11 In recent years, momentum
to expand the adoption of carbon pricing policies has been growing. More than 400
investors with more than $24 trillion in assets have called on governments to
establish “stable, economically meaningful carbon pricing.” 12 Already, more than 1,000
businesses use a price on carbon or plan to do so in the next two years. 13 In addition, at the
United Nations climate talks in Paris last December, govern- ments, businesses, and nongovernmental organizations announced the
new Carbon Pricing Leadership Coalition as a means to accelerate and expand the adoption of carbon pricing worldwide. 14
No link and turn—empirics prove cap-and-trade doesn’t devastate the
economy—it creates jobs and lowers energy bills
Carroll 15
Lauren Carroll. “'With certainty' cap-and-trade would wreck the economy, Rubio says.” Politifact. April 23rd, 2015.
http://www.politifact.com/truth-o-meter/statements/2015/apr/23/marco-rubio/rubio-cap-and-trade-would-hurt-economy-might-
not-h/
Devastation? Cap and trade is a simple concept: The government sets a cap on carbon dioxide and other greenhouse gas emissions
that contribute to climate change. To comply, companies must either upgrade to cleaner technologies or purchase allowances to
continue polluting. Proponents say that because emissions would cost companies more, it’s in their interest to find ways to limit
their pollution, through new technology or otherwise. Critics say cap and trade would cause companies to slow down production or
pass along additional costs to customers. Quite
a few states already have cap-and-trade programs,
such as the Northeast Regional Greenhouse Gas Initiative among 10 states, as well as the Western
Climate Initiative, which includes several states (primarily California) and parts of Canada. The European Union has a cap-and-
trade program among its member nations. Existing
cap-and-trade programs haven’t devastated their
local economies. For example, an independent consulting firm looked at the economic
impact of the group of Northeastern states engaged in a cap-and-trade program that has
lowered emissions by 40 percent since 2005, and the results were positive. The 2011
analysis found that the program created $1.6 billion in value added to the
regional economy . It also created 16,000 jobs, and residents collectively saved more
than $1 billion on energy bills. Depending on the policy specifics, different programs would have different effects on
the economy and climate change, said Duke University energy policy professor Billy Pizer, though the ideal policy would seek to
balance costs and benefits. " Europe, California, New England—they all have cap and
trade and nothing has been devastated ," Pizer said. " There is nothing about
a generic cap and trade that is devastating ." The European Union program has struggled over the
past few years -- in part due to the global recession and falling carbon prices on the continent. However, a 2012 report out of the
Environmental Defense Fund found that costs were significantly lower than predicted. The report cited another study that found the
program "did not significantly affect" employment, profits or added value. Joseph Aldy, an energy policy professor at Harvard
University, pointed out that former President George H.W. Bush established a cap-and-trade program designed to mitigate acid
rain. A recent study out of Harvard found that the program created annual benefits of up to $116 billion, compared to just $2 billion
in costs -- mostly as a result of public health improvements.

Cap-and-trade benefits the economy—the economic costs are marginal at

best
Carroll 15
Lauren Carroll. “'With certainty' cap-and-trade would wreck the economy, Rubio says.” Politifact. April 23rd, 2015.
http://www.politifact.com/truth-o-meter/statements/2015/apr/23/marco-rubio/rubio-cap-and-trade-would-hurt-economy-might-
not-h/

For a national cap-and-trade program, estimates of economic impact are all over the map. Consider the analyses of a failed 2009
proposal for a federal cap-and trade program and their effect on household costs. The Congressional Budget Office, Congress’
independent research arm, found the bill would cost about $175 per household annually. The conservative Heritage Foundation
predicted instead a much higher cost: $1,241 per household annually. On the other end of the spectrum, the American Council for an
Energy-Efficiency Economy estimated that a family could save $750 after the bill had been in effect for eight years. Economic

benefits from cap and trade could come from more energy-efficient tech nology and
less climate-change related costs, according to advocates. For example, the 2010 Economic Report from
the President said the 2009 congressional proposal could save the economy up to $2 trillion as a result of avoided damages from
The Energy Information Administration, a statistical office within
more intense climate change.
the U.S. Energy Department, looked at the cap-and-trade proposal and found that the
macroeconomic effects were minimal -- with the bill, economic growth by 2035 would
be 0.3 percent less than it would be absent the bill. They also found that a later cap-and-trade
proposal would have a similar effect. We should note that one expert -- Patrick Michaels, director of the Center for the Study of
Science at the libertarian Cato Institute -- told us the 2009 proposal would have been "devastating" to the economy because it
involved unacheivable goals and assumed the eventual invention of technology that doesn’t exist yet. Michaels, a climatologist, noted
though that this wouldn’t be the case for every cap-and-trade policy. " It is political hyperbole to say that
the impacts would be ‘devastating, ’" said Gilbert Metcalf, a professor of public
finance at Tufts University. "I agree with Rubio that the economic impacts are probably easier to forecast than the
climate impacts; (the economic impacts) are just not what he is saying they are."