There is some debate about the magnitude of warming experienced worldwide over the past century. However, there is more debate about how much manmade carbon dioxide (CO2) emissions have contributed to this increase in temperature, and there is even greater uncertainty about how rapidly the Earth will warm over the next century and beyond.[2]
If there will be little warming, then there is little need to address carbon emissions. However, regardless of the amount of projected warming, policies should be evaluated by comparing their impact relative to their costs. We find that carbon policies flunk the cost-benefit test by wide margins.
When considering both costs and benefits, a carbon policy with restrictions similar in size and scope to those in the Waxman–Markey legislation (an 80 percent cut in CO2 emissions by 2050),[3] which the House of Representatives passed in 2009, would lead to:
An aggregate income loss to the U.S. of $207.8 trillion by 2100;
An aggregate income loss worldwide of $109.6 trillion by 2100;
A one-year worldwide loss of $3.5 trillion in 2100, equivalent to 4.75 percent of U.S. gross domestic product (GDP); and
Adverse impacts, on net, in every year of implementation.
These same results would hold for a carbon tax, and the results are even worse if more countries adopt the carbon-restricting policies.