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The Montana Economy: How Will Climate Change Legislation Impact Economic and Job Growth Study (2010)

BOTTOM LINE UP FRONT:

Montana has fared relatively better in the current recession compared to other states. If climate policy bills like Waxman/Markey (H.R. 2454) or Kerry/Boxer (S. 1733) are enacted, economic recovery from the current recession will be impeded as business and households face rising energy prices. In the longer term, Montana’s real GDP, employment, industrial output, state budget revenues and household income will fall relative to the baseline forecast. As state policymakers consider legislation to reduce U. S. GHG emissions, they need to consider that the cost of reducing emissions is likely to exert significant drag on the state’s economy.

 

Congress is now debating far-reaching energy legislation that would impose an aggressive “cap-and-trade” system on greenhouse gas emissions (GHG) and mandate high levels of energy efficiency and renewable energy.

o Cap-and-trade is a regulatory system for mandating increasingly lower emissions of GHG. Regulated entities must purchase emission allowances from the government for each ton of GHG emitted. Unused emission allowances can be bought or sold (“traded”) by any person.

o The U.S. House of Representatives’ bill, known as Waxman-Markey, and the Senate version, known as Kerry-Boxer, would cap GHGs beginning in 2012 and become increasingly aggressive, requiring as much as a 20 percent reduction of 2005 levels in 2020 and, finally, an 83 percent reduction in 2050.

o Energy efficiency provisions would impose “energy saving mandates” across all sectors of the economy.

o Renewable Portfolio Standards (RPS) proposed in the legislation would dictate that states generate 20 percent of their electricity from renewable sources by 2030.

 

Despite the current recession, Montana has seen employment gains that have fared the state better than the U.S. as a whole. However, if pending federal energy legislation is enacted, Montana will face a declining economy and increasing unemployment.

o Montana’s employment, gross state product, industrial output, state budget revenues and household income will fall.

o Employment: By 2030, as emission reduction targets tighten and the free allocation of permits and generous carbon offsets phase out, Montana would stand to lose between 4,964 and 6,761 jobs. The primary cause is lower industrial output due to higher energy prices, the high cost of complying with required emissions cuts and greater competition from overseas manufacturers with less stringent emissions requirements.

o Gross State Product: Higher energy prices, fewer jobs and loss of industrial output are estimated to reduce Montana’s GSP by as much as $900 million to $1.2 billion in 2030.

o Industrial Output: Montana is likely to experience a decrease in manufacturing output. Overall manufacturing output declines by 5.1 percent in the low-cost case and by 5.8 percent in the high-cost case. Two important energy-intensive sectors, nonmetallic mineral product manufacturing and primary metal manufacturing, would fall considerably, declining by up to 24 percent in 2030. Coal production would fall by 94 to 96 percent.

o State Budget Revenues: Since Montana typically receives about 10 cents of every dollar of income generated in the state, projected declines in GSP would result in a $49 to $65 million reduction in state tax revenues. Paired with higher energy prices, this will reduce state budget receipts and force Montana policymakers to make hard choices about how to fund basic services, such as law enforcement and schools.

o Household Income: Disposable income would fall by an average of $414 to $764 in 2030. Low-income families and the elderly, who spend a disproportionate amount of their income on energy, will be especially hurt.

Montana’s economy has benefited from growth in mining and related industries, enabling the state to fare better in the current economic climate. Mining, however, is particularly vulnerable to adverse impacts from federal climate change bills.

o The Montana economy actually grew in 2008—at a rate of 1.8 percent — compared to the U.S. economy, which only grew at a rate of 0.7 percent in 2008. Employment also grew in Montana at a rate of 1.7 percent in 2008.

o Montana’s real per capita GSP grew 25 percent in the last decade, five percent more than the national growth in that period.

o In the past 10 years, employment in Montana’s mining industry grew by 68.4 percent – that is nearly double the growth of the mining industry in the United States over the same time period.

o According to a study by commissioned by the National Mining Association, the mining industry contributed 16,220 jobs and $3 billion to the state’s economy in 2007.

o Montana is a substantial oil producing state and is responsible for nearly two percent of U.S. production. According to a 2009 study by PricewaterhouseCoopers, the oil and natural gas industry supported 34,210 jobs and contributed $3.3 billion to the Montana economy in 2007.

 

Multiple economic analyses show that these federal energy bills would increase the price of electricity, gasoline and natural gas. Consequently, economic productivity, employment and household income would decline.

o To meet the stringent emissions targets of Waxman-Markey, electric companies would have to substitute high-cost technologies for conventional generation, increasing prices for Montana families and businesses.

o Energy prices in Montana, a state which now depends on coal (the energy source most at risk under mandatory greenhouse gas emission caps) for 63 percent of electricity generation, would rise higher than many other states.

o By 2030 the price of gasoline would increase by as much as 27 percent, electricity up to 61 percent and natural gas up to 78 percent.

o Faced with skyrocketing energy costs, decreasing production and greater competition from overseas manufacturers without these pressures, Montana businesses will have no choice but to cut thousands of jobs.

o Montana’s 967 schools and universities and 65 hospitals will likely experience a 18.1 percent to 27.9 percent increase in energy expenditures by 2030. For government entities, costs for services, including public transportation and vehicle fleets, such as school buses, would also rise.

o Montana’s current relatively favorable electricity prices are an important factor in the state’s ability to keep business costs low and thus, attract new sources of employment.

 

At a time when margins are running thin on family budgets, the average Montana family will experience higher energy costs, leaving less income to be spent on other necessities.

o The average Montana family would see their home energy costs go up 61 percent by 2030.

o The ripple effect of higher energy prices would impose a financial hardship on Montana households with disposable income being reduced by $414 to $764 in 2030.

o Because they spend a greater share of their income on energy costs, low-income families, including elderly residents on fixed incomes, will suffer disproportionately from the effects of this legislation.

We all want a clean environment. Most of us live in Montana because we love our Big Sky and the beautiful land beneath it. But those shrill voices demanding that we trade our economic well being for a clean environment are trying to drive us into a false choice. Exporting our jobs to cheap overseas labor and our energy production to dirty overseas power plants will not help the environment or reduce greenhouse gases. There are alternatives to cap-and-trade, and a politician’s willingness to look at them can be a litmus test indicating whose interests he or she is really serving.

 

 

The Montana Policy Institute is a 501(c) (3) policy research organization that equips Montana citizens and decision makers to better evaluate state public policy options from the perspective that policies based upon limited government, individual rights, and individual responsibility will result in the greatest common good. To find out more or for copies of the complete Cap-and-Trade study, visit us at www.montanapolicy.org. NOTHING WRITTEN here is to be construed as an attempt to influence any election or legislative action. PERMISSION TO REPRINT this paper in whole or in part is hereby granted provided full credit is given to the authors, the American Council for Capital Formation, and the Montana Policy Institute.

Copyright © 2010

The Montana Policy Institute

67 West Kagy Blvd., STE. B

Bozeman, MT 59715

406-219-0508

www.montanapolicy.org

 

Click here for full study.

True Motivations

As a rule I try not to assign motives to people’s actions, especially when I don’t agree with them. More often than not it results in making worst-case assumptions about what they’re up to and poisons any prospect of agreeing on something in the future.

I’ve also been a strong believer in the maxim “Never be too quick to rule out stupidity.” A lot of people do stupid things because, well, they’re stupid. Or more accurately they’re uninformed on an issue. If I recognize this ignorance as the cause of our disagreement rather than assuming bad intentions it gives me the opportunity to make them more informed and bring them to my side.

And I generally hope they’ll give me the same benefit of the doubt.
But at some point in some cases you do have to rule out ignorance or stupidity and realize that some people mean to do you harm, that they’re hiding their true objectives, and that they’re willing to lie cheat or steal to achieve them.

Which brings us to many environmentalists. The BP spill in the Gulf of Mexico is a tragedy for the local environment and economy and a catastrophe (as it should be) for BP. Now come the calls for banning all offshore drilling, past present and future. But is this reaction meant to save the environment from a rare event, or is something else at play?

If the people calling for shutting down offshore oil development were worried primarily about oil spills then they should instead be calling for more onshore and offshore drilling in the US, not less. Oil tanker spills occur much more often and account for many more times the oil released into the environment than what’s spilled from drilling rigs. Reducing the number of oil tankers out there by tapping our reserves here at home would result in demonstrably fewer (and smaller) spills than having these relatively fragile gas tanks plying the oceans.

The fig leaf they’re using of reducing our dependence on foreign oil and carbon emissions is also belied by their resistance to real measures that address both those issues: increased domestic production, and nuclear and hydro energy. Sure, there are costs involved in these methods, but windmills kill birds and blight the landscape (or seascape if you’re a Kennedy), large solar projects endanger desert wildlife; and all of these alternative “green” production methods enormously increase the cost of power, which will inevitably export production, jobs, and prosperity to countries that don’t share our reverence for Gaia.

The truth is they want to reduce energy production and consumption period, not make it safer or greener or anything like that. It’s not energy they’re against it’s people and prosperity. They see us as a cancer on the earth that must be contained, and the way to do that is to take our lifestyle and standard of living back to a time when we used fewer resources and had less impact on Mother Earth – a time when people died from simple infections, squatted outside, and had a life expectancy of what we call today “middle age.”

And that’s fine. There are even parts of that argument that have real merit. But let’s have a conversation about that rather than dancing around the point and attacking people and industries under a hidden agenda and using dishonest tactics. Let’s look at the costs and the benefits of all these options and challenges, and above all leave space for people to make decisions about how to achieve their own happiness – so long as they’re not harming anyone else – without forcing top down, one size fits all “solutions” down their throats.

Montana’s Bus Systems Harmful to Taxpayers and Environment

Montana’s Bus Systems Harmful to Taxpayers and Environment

By: Carl Graham, President, Montana Policy Institute

 

We’re often told that public buses are the most cost effective and energy efficient means of transportation available. But a recent MPI study found that this perception doesn’t hold true in rural states like Montana. When compared to driving private automobiles, public transit in Montana costs more and takes a greater toll on the environment per passenger mile than does driving that same mile in a private vehicle.

In addition, high subsidies on public transit systems siphon away nearly half of Montana’s gas taxes that would otherwise be available to build, improve or maintain our public roads. These subsidies support a system that Montanans use to fulfill far less than 10 percent of our travel needs, despite the fact that it’s cheap or even “free” to the rider.

The cost per passenger mile of driving in Montana is substantially lower than that of public transit, and is mostly borne by the person doing the driving. Contrary to popular belief, there are few federal or state subsidies to highways. To the extent that subsidies do exist, local governments are the primary source.

The average cost of driving in Montana—including subsidies —is a little under 23 cents per passenger mile, or about a penny above the national average. The average cost of public transit in Montana, meanwhile, is about $1.76 per passenger mile, with more than 90 percent of that cost subsidized by non-transit users.

Using a different measure, Montana transit riders pay an average of less than 40 cents each time they board a bus, while taxpayers kick in an average of more than $5 to support each of those trips.

Public transit also takes a heavy toll on the environment. Montana’s urban buses use on average twice the energy and release more than twice the carbon emissions into the atmosphere per passenger mile as a light truck. A Toyota Prius would be nearly 6 times more efficient.

The major problem is that urban buses in Montana run mostly empty, filling just one-sixth of their seats. Bus systems in larger cities nationally are much more efficient per passenger mile for the obvious reason that they carry more passengers per mile. As a high mileage, low population state, we have to decide if want to spend and pollute more by promoting an ill-suited policy “solution,” or if maybe we should look at other options.

It’s quite clear that Montanans who are concerned about either public expenditures or climate change and air pollution should be looking for alternatives to traditional urban transit models that rely on buses and scheduled routes to move people around. The question is whether we impose a solution by forcing more people to ride buses, or whether we seek choices that take into account local conditions while still meeting the needs of those who want or need public transportation.

There are many options available to help decrease the costs and environmental impacts of public transit in Montana. Removing state and federal government bias toward high cost, high emissions vehicles that run scheduled routes regardless of demand and allowing communities to tailor their transit programs to local conditions should be one of the first steps toward creating more cost effective and environmentally friendly systems. Other options include smaller vehicles or shared on-demand taxis, privatization, and vouchers for those who need assistance. These types of systems would take people where they want to go when they want to get there at much less cost and with a much lower environmental impact. In short, cities need to decide if they’re in the business of moving people or of running buses.

 

####

For Immediate Release

599 Words

 

The referenced study can be found at www.montanapolicy.org.

Carl Graham is president of the Montana Policy Institute, a nonprofit, nonpartisan policy research and education center based in Bozeman, MT.

He can be reached at:

67 W. Kagy Blvd., Ste. B

Bozeman, MT 59715

(406) 219-0508

cgraham@montanapolicy.org

 

Montanans Are the Losers Under Cap-and-Trade

We’re hearing a lot about jobs lately and how important it is to “save or create” them. That’s all well and good, but many of those who on one hand wax eloquent about ways to reward businesses for hiring people are on the other hand feverishly pressing for programs that will make hiring more difficult and expensive. The “cap-and-trade” measures currently rattling around in Washington are great cases in point.

Congress is now debating far-reaching energy legislation that would impose an aggressive cap-and-trade system on greenhouse gas emissions (GHG) and mandate high levels of energy efficiency and renewable energy production. You might be hearing that this legislation is dead in the Senate, but nothing could be further from the truth. Big banks, big business, and other special interests have too much riding on this new financial scheme for it to go quietly into the night. And as usual, the rest of us would foot the bill.

As an example, a study released on February 11th by the Montana Policy Institute (MPI) and the American Council for Capital Formation (ACCF) shows that Montana would stand to lose between 4,964 and 6,761 jobs by 2030 under cap-and-trade. And that’s just the start.

Most jobs would be lost due to lower industrial output because of higher energy prices, the high cost of complying with emissions cuts required by the legislation, and greater competition from overseas manufacturers without the same pressures. Among the hardest hit would be manufacturing jobs—the heart of our state’s economy – and those at the lower end of the wage spectrum.

As Congress debates our energy future, we need to understand what Washington special interests are trying to do to our economy, our jobs and our future. It’s clear from these findings that Montana has nothing to gain—in fact, too much to lose—from cap-and-trade legislation, and that the economic impact of this legislation on Montana is enormous and not isolated to lost jobs.

• By 2030, the average Montana family can expect the price of electricity to increase by up to 61 percent, gasoline 27 percent and natural gas 78 percent. Low income families and the elderly, who spend a disproportionate amount of their income on energy, will be especially hurt.

• Montana would experience a sharp decrease in manufacturing output. The higher energy prices, fewer jobs and loss of industrial output under this legislation are estimated to reduce Montana’s gross state product (GSP) by between $900 million and $1.2 billion in 2030. Coal production alone could decrease by 96 percent. The impacts of artificially higher fuel, feed, and chemical prices on our farming families will force hard choices for them as well.

• State tax revenues would be reduced by as much as $65 million by 2030, forcing Montana policymakers to make hard choices about how to fund basic services, such as law enforcement, hospitals and schools, even as their costs increase with higher energy prices.

Despite the current recession, recent employment figures demonstrate a promising trend. In 2008, while the U.S. unemployment rate rose, Montana’s employment actually grew at a rate of 1.7 percent, and our state’s economy grew at a rate of 1.8 percent.

But much of this growth is tied to mining and the development of our natural resources, areas hard hit by cap-and-trade legislation. In the past ten years, employment in the Montana mining industry has grown 68.4 percent and is now responsible for 16,220 Montana jobs. A recent study by Pricewaterhouse Coopers credited the oil and natural gas industry for 34,210 jobs and a $3.3 billion contribution to the state’s economy. If cap-and-trade legislation is enacted, this growth would be reversed as jobs and production move overseas.

We all want a clean environment. Most of us live in Montana because we love our Big Sky and the beautiful land beneath it. But those shrill voices demanding that we trade our economic well being for a clean environment are trying to drive us into a false choice. Exporting our jobs to cheap overseas labor and our energy production to dirty overseas power plants will not help the environment or reduce greenhouse gases. There are alternatives to cap-and-trade, and a politician’s willingness to look at them can be a litmus test indicating whose interests he or she is really serving.

 

Word count: 716

Carl Graham is president of the Montana Policy Institute, a nonpartisan policy research organization that equips Montana citizens and decision makers to better evaluate state public policy options from the perspective of free markets, limited government, individual rights and individual responsibility.

 

Cap and Trade

Cap and Trade

By Rep. Bob Lake

 

There’s little doubt that the Waxman-Markey cap and trade bill will have a negative impact on our economy. Economists on both sides of the issue agree that it will, the question they’re debating is by what degree. It’s amazing to me that in one of the economically-weakest points in our country’s history, Congress would be contemplating passing legislation that all agree would make things worse.

The experts are projecting losses to our GDP and job growth and at the same time higher prices for consumers for gasoline, electricity, and consumer goods. The double-whammy of declines in jobs and higher prices for consumers can only serve to make our economic situation worse and slow our recovery.

What are the impacts we can expect here in Montana? Considering that our second-biggest industry in much of the state is energy-production and our largest industry, agriculture, depends on significant energy inputs, it could be disastrous.

As I’ve been watching this proposals’ progress, which will now be considered by the US Senate, one of the things I’ve been contemplating is what impact it could have on our state tax revenues. Most people recognize that in recent years we’ve been in a relatively rosy budgetary situation, with at one point having a 1.4 billion budget surplus.

A large factor in our growth has been a healthy influx of tax revenues from the increased oil and gas activity in eastern Montana. We’ve had increases directly from the oil and gas severance taxes and property taxes but also indirectly in the form of income taxes from all the new, high-paying jobs in the oil fields of Eastern Montana. Our state also has significant revenues from coal production (though not nearly what the state of Wyoming realizes).

I fear that a lot of those tax revenues will dry up in very short order under a cap and trade scenario.

A bigger challenge we face is that the influx of tax revenue we’ve had in recent years has fueled an unprecedented growth in state government. The new funding that has been added to state government during the good times now become ongoing obligations we somehow need to fund in future years. That leaves two options: increase taxes to offset a reduction in energy-related taxes or start cutting government services.

If we increase taxes, we’re turning that double-whammy (reduced job growth and higher consumer prices) into a triple-whammy by adding a potential increased tax burden on homeowners or income taxpayers. If we reduce services the needy will suffer and the triple turns into a quad.

As for agriculture our #1 industry, cap and trade is going to hit small producers (which make up the vast majority of Montana operators) inordinately hard. Most ag businesses have very little opportunity to pass on their increased energy input costs on to consumers. Cap and trade will make fuel, fertilizer, and feed costs all increase at the mercy of the market. Inevitably, we will all be forced to pay more for our food because of these higher costs.

We all know the thin margins most ag operations already operate on. Cap and trade could be the proverbial straw that breaks the camels’ back for a lot of family farms and ranches.

Don’t get me wrong, there are benefit’s to reducing our nation’s carbon emissions. Reducing those emissions comes with a cost, and right now Montana is in a position to be hit harder than most other states based on the current legislation already passed by the House and on its way to the Senate.

There are other options available. I urge Senator Baucus and Senator Tester to work to develop a better bill that will actually improve conditions in Montana. The Waxman-Markey bill certainly does not.

 

New Angle on Ending Our Oil Dependency

This comes from an organization called Secure Our Fuels. I frankly don’t know much about them and am talking about their efforts here on the blog because I don’t have time to dig into their background or independently verify their numbers. They’re also running ads in Montana so they obviously have an agenda. And there’s absolutely nothing wrong with that so long as what they’re saying is truthful and fair, and we have no indication that it isn’t.

So with that namby pamby introduction, just what’s their point that’s worth talking about here? It’s mainly that Congress is looking at cutting off 90% Montana’s gasoline supply. Well, not cutting it off but making it come from someplace else and making it more expensive. I’m going to selectively cut and paste a little rather than trying to paraphrase or quote. The bold is mine. You can get the full text at their web site.

“New Campaign Seeks to Educate Montanans on Negative Impacts of a Nationwide Low Carbon Fuel Standard (LCFS)

“In any form, a Low-Carbon Fuel Standard would represent a major blow to America’s economic health and strategic position,” said CEA’s Michael Whatley, a leading expert on LCFS proposals. “That’s because the energy we import daily from friends like Canada would essentially be prohibited from crossing our border. If these abundant resources are cut off, our dependence on unstable regions of the world would skyrocket, and so would the price American consumers pay at the pump.

Added Whatley: “More than 90 percent of the oil Montana consumers depend on each day comes from Canada – energy that would be banned from crossing the U.S. border under an LCFS. As such, this campaign seeks to alert everyday Montanans about the serious implications of this policy, and enlist their support in ensuring it does not come to pass.”

So tell me again how we’re supposed to get off foreign oil (I don’t count Canada as foreign. They drink LaBatt’s for crying out loud)? What happens to people who are just getting by when their gas bills skyrocket? Where’s all that compassion for the little guy?
Just one more brick on the double-talk pile from people whose real agenda is to control how we live, what we buy, how we drive, what we pay, what we say, and everything else. They say they want to reduce our energy dependence, but what they really want to do is reduce our energy, no matter what the cost to our economy.

There is no credible evidence that “green” jobs will outnumber jobs lost if energy prices skyrocket, as they inevitably would under proposals like this and its cap and trade bretheren. If there’s a market for this stuff the private sector looking to line its own evil pockets will find and satisfy that market, and satisfly consumers and manage the resources behind it in the process. Anything else is just robbing from Peter to pay Paul, with special interests and Washington insiders deciding who’s Peter and who’s Paul.

They’re just so much smarter than us. If only we’d just sit back and not worry our pretty little heads about anything but paying our taxes life would be good. Well, it’d be good for the insiders and special interests making the rules. The rest of us can eat cake.

Western Climate Initiative Cap-and-Trade

Economic research institute finds deficiencies in WCI’s analysis of impacts from recommendations.

 

Bozeman, Mont.—Specific proposals that several Western states would implement to comply with a proposed cap-and-trade carbon emissions control pact would destroy jobs and erode income, according to a report co-released by an economics institute.

In a thorough review of the claims made by the Western Climate Initiative, the Beacon Hill Institute at Suffolk University identified several flaws made by the seven state consortium, calling into question so-called cost savings ranging between $11.4 billion and $23.5 billion. These flaws render WCI’s projections useless in determining the WCI’s cost to state economies.

The authors of the report write, “Using the Western Climate Initiative’s own projections of increases in fuel costs, BHI finds that the policies will decrease employment, investment, personal income and disposable income. While WCI claims the ‘design is also intended to mitigate economic impacts, including impacts on consumers, income, and employment,’ they fail to quantify the impacts.”

Seven states are full participants in WCI: Arizona, California, Montana, New Mexico, Oregon, Utah, and Washington. Beacon Hill Institute found that WCI’s policy recommendations “would have substantial negative effects” on the economies of its member states. Under a scenario in which 100 percent of greenhouse gas emission permits would be auctioned off to emitters in a cap-and-trade scheme, BHI determined that the seven states:

* Would lose from 103,931 to 251,674 private sector jobs, while the permit revenue would allow the states to hire 57,269 to 142,241 state employees;

* Would put investment by firms at serious risk by slowing investment in the region by $548 million to $1,448 million;

* Would diminish total personal income, which would fall by $6.35 billion to $18.31 billion per year;

The proposals’ negative economic effects stem from the price and tax increases the states would impose on the energy and transportation sectors. Because a cap on carbon emissions is effectively a tax on energy production that is passed to industry, businesses and consumers, the effect is likely to drive commerce and jobs to other states or countries.

“The cap-and-trade program would increase input costs for producers located within WCI states, placing them at a competitive disadvantage to those outside the areas,” BHI noted. “The pressure would be especially acute for producers that utilize large amounts of energy in the production process, such as manufacturers.”

Beacon Hill found that none of the seven WCI states would escape economic harm should cap-and-trade be imposed. Montana could lose as many as 2,869 jobs and $689 million in personal income by the year 2020.

“This report shines the light on yet another example of political advocacy masquerading as scientific analysis,” said Carl Graham, president of the Montana Policy Institute. “Montanans deserve an honest look at the true long term costs and benefits of climate change measures before special interest groups and their politicians make decisions that will cost us our jobs, empty our pocketbooks, and dictate how we live our lives.”

 

The complete study is available at www.montanapolicy.org.

 

The Montana Policy Institute is a nonprofit, nonpartisan policy research center based in Bozeman. To find out more visit us on the web at www.montanapolicy.org.

 

Montana Climate Change Data

This is a study conducted by the Science and Public Policy Institute that details Montana’s climate information over the past century or so:

MT Climate Change Data

Here are a couple of snippets:

“…even a complete cessation of all CO2 emissions in Montana will be completely subsumed by global emissions growth in just 2 weeks time! A fortiori, regulations prescribing a reduction far less than a complete cessation of Montana’s CO2 emissions would produce no detectable or scientifically meaningful impact on local, regional, or global climate.”

“Unfortunately, the same cannot be said for the economic consequences of greenhouse gas emissions’ legislation…” and it goes on to list those consequences in a quantifiable, i.e. scientific way.
One of the problems we cited in our peer review of the Montana Climate Change Action Plan was that it didn’t even try to quantify the costs or the benefits of reducing greenhouse gases. All it did was assume that any decrease in gases was worth any cost of reducing them. That’s just, as Jonah Goldberg often says, silly on stilts.
The whole point of public policy is to measure costs and benefits – tangible and intangible – and to craft policies (or leave policies alone) that result in the good outweighing the bad. I would add that staying out of the way is generally a pretty good option, too, but that’s a different argument.
We’re about to get a nationally planned and coordinated climate control agenda shoved down our collective throats that’s long on rhetoric and alarmism and remarkably short on science and logic. MPI’s got a couple of products in the pipeline addressing this fast moving train, but candidly, with less than a year of operations under our belt, we don’t have nearly the resources yet to, as William F. Buckley said, stand athward history on this one. We’re going to need your help.
We’ll do our best to get real science and real data out there. You need to let your local legislators and media know that you want them to recognize there’s another side to this story and that they should make their decisions and write their stories based on the full set of facts.

MCCAP Press Release

Press Release

Report challenges economics of Montana Climate Change Action Plan (MCCAP)

The Montana Policy Institute has published a report challenging MCCAP methodology and conclusions

Bozeman, MT. April 23rd, 2008: The Montana Policy Institute, a new nonpartisan policy research organization in Montana, has just released a study by the Beacon Hill Institute challenging the economic assumptions and methodology employed by Montana’s Climate Change Advisory Group’s recently released Montana Climate Change Action Plan (MCCAP). The study does not address the science of climate change or attempt to assign motives to the Advisory Group’s recommendations. It simply examines the economics of the MCCAP plan and the methodology employed to assess the plan’s costs and benefits.

The study concludes that:

• MCCAP costs and benefits are not quantified in a way that allows them to be compared. Estimated costs to reduce greenhouse gases of between $93 million to $691 million are set against metric tons of greenhouse gases reduced, without any attempt to weigh the benefits of reducing those gases against the costs of reducing them;

• When estimating economic impacts, costs are sometimes misinterpreted as benefits;

• Cost estimates leave out important factors, including program expenses, alternative scenarios, demand-based consumer responses, and other factors, resulting in unrealistically low best-case figures.

These shortcomings disqualify the MCCAP as a scientifically sound basis for public policy. The Montana Policy Institute believes that a comprehensive cost/benefit analysis using realistic assumptions and sound economic principles should be conducted before Montana policymakers decide to create new mandates, new bureaucracies, and new open-ended spending commitments. The stakes are too high on both sides of the climate change issue to accept anything less than a full and honest debate.

 

The complete study can be found at: www.montanapolicy.org.

The Montana Policy Institute is a nonpartisan, tax exempt policy research organization focusing on Montana solutions to Montana problems. Our mission is to equip Montana citizens and decision makers to better evaluate state public policy options from the perspective of limited government, individual liberty, and individual responsibility.