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NAM/ACCF: Distorting their own distorted analysis of climate legislation

Laurie Johnson

Posted September 10, 2009 in Solving Global Warming

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The National Association of Manufacturers (NAM) and the American Council for Capital Formation (ACCF) are at it again, this time running full throttle scare ads across the country (click here for an example) against the American Clean Energy and Security Act (ACES). ACES will bring us greater energy independence, more climate protection, and millions of clean energy jobs.  But they want you to believe climate protection will bring nothing but hardship and economic ruin to America.

Of all their little "facts" and figures, here's one NAM/ACCF actually don't want you to know: By 2030, their own model predicts the average American household's income going up by at least 100 times the increase in household energy expenditures from curbing global warming. In other words, your energy expenditures will go up by less than 1% of the increase in your income to protect the planet from the most dangerous impacts of global warming.

NAM/ACCF have boiled their flawed analysis (the summary of which was released last month), down to 30 seconds and three scary statistics: gasoline price increases, electricity price increases, and dire job losses.

Don't let these industry numbers fool you. NAM/ACCF's cost estimates are much higher than those from authoritative studies by the Environmental Protection Agency (EPA), the Energy Information Administration (EIA), and the Congressional Budget Office (CBO). They are taken out of context. And, most critically, they hide the basic finding (from their own analysis) that wholly undermines their argument: household incomes grow orders of magnitude faster than their cost estimates! Shame on them for not sharing.

The tables speak for themselves:

  Exaggerated costs

Gasoline price increase

2.8 to 4.6 times higher than EPA and DOE (year 2030; 2007$)

Electricity price increase

2.9 to 3.7 times higher than EPA and DOE (year 2030; 2007$)

 

 Out of context costs

Electricity bills, not prices, are what matters:*

Average annual change in household electricity bills (2012-2030, 2007$):

* NAM/ACCF doesn't provide these numbers

* EIA/DOE does: $33 more per year ($2.75/month, 9 cents per day)

* EPA (Environmental Protection Agency) does: $6 lower per year, thanks to modeling ACES's energy efficiency provisions the most thoroughly

Gasoline: Even by NAM/ACCF's own analysis, their projected increases in gasoline prices amount to an average increase of only 4.8 cents/gallon per year by 2030 (EPA and EIA projections are even lower: 1 cent/yr and 1.7 cents/yr, respectively).

2030 Projected Energy Expenditures vs. 2030 Projected Increases in Average Household Income: $313 to $454 ($0.85 to $1.24 per day) relative to $27,000 to $28,000 (2007$)** more in household income over 2009 levels. Even despite exaggerated costs, income gains dwarf them.

* CBO does not provide estimates for the items in this table.

NAM/ACCF's misinformation campaign against ACES is no surprise. Almost verbatim, it's a repeat of their analysis last year against the Lieberman-Warner Climate Security Act. Last year, using the same model, NAM/ACCF projected GDP would grow 75% by 2030, which meant healthy increases in household income relative to today's levels, and many other economic gains. These gains far exceeded projected costs. And these gains were also shared widely across states. Once again, they're hiding the good news from us.

Finally, NAM/ACCF's job loss predictions completely contradict 40 years of overwhelming historical evidence of positive job creation, economic growth, and the affordability of environmental protection.

Rather than being an economic liability, climate legislation will give us the economic growth, jobs, climate protection, and energy independence Americans deserve. At a very affordable price. Don't take it from me, NAM/ACCF thinks so too -- they just make you work hard to find their dirty little secret.

 

** This blog was updated 1/15/2009, to make a correction to NAM/ACCF's projected increase in average household income, as well as provide the range  between the "low cost" case and the "high cost" case.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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