The statement: “The cost of the Paris climate agreement to the US economy is severe. The deal will cost US workers 640 million jobs and $ 3 billion in economic growth by 2040. ”- Texas Railway Commissioner Wayne Christian.
The Republican oil and gas regulator, one of three Texas Railroad Commissioners, wrote an open letter in late January that he was fed up with environmentalists and what he described as the ‘awake’ liberal policies that threaten the smooth recovery of To disrupt Texas. ‘energy sector of pandemic waves.
PolitiFact rating: Half true. Trump similarly referred to these figures to justify his decision to withdraw from the agreement. Following this announcement, authors of the study said that the “Trump administration used the results selectively” and did not consider the key limitations of their findings. Christian also omitted these reservations.
Discussion
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In the letter posted on the agency’s website on January 5, Christian reiterated President Joe Biden’s promise to rejoin the Paris climate agreement, which he gave on his first day in office. . Former President Donald Trump withdrew from the international treaty in 2017, which is designed to reduce carbon emissions, although the terms of the agreement stipulated that the US would not be able to formally withdraw until November 4, 2020.
“That would be a huge mistake,” Christian wrote. “The agreement entails sky-high costs with very low benefits and unfairly sets a double standard, based on unproven assumptions and climate models that are almost entirely wrong.”
Then Christian pointed to a 2017 study released by an economic research firm on behalf of the U.S. Chamber of Commerce and the American Council for Capital Formation, an economic policy business.
The study, entitled “Impacts of Greenhouse Gas Regulations on the Industrial Sector,” was also quoted by Trump when he justified his decision to withdraw from the Paris Agreement.
“The cost to the economy at this time would be about $ 3 billion in lost GDP and 6.5 million industrial jobs, while households would have $ 7,000 less income and in many cases much worse than that,” Trump said in a 2017 announcement. of the Rose Garden.
The gloomy outlook on the figures gives way. When the US initially joined the agreement in 2016, the Obama administration set long-term goals to reduce emissions across the economy by 80 percent by 2005 levels from 2005 levels. The government has listed a mix of existing and planned policies that could help the US comply with them. target, but the reduction due to the policy would still not fall below the 2050 target.
Although there is debate about how far the policies would go, ‘it is clear that such a gap cannot be filled without contributions from the industrial sector’, reads the study conducted by NERA Economic Consulting. The profit and job loss figures quoted by Christian and Trump represent the economic costs of narrowing the gap, according to NERA’s analysis.
Trump and Christian are repeating the findings of the report accurately. More restrictions on fossil fuel emissions mean higher production costs, and higher production costs mean the closure of uncompetitive manufacturing enterprises, and the closure means less manufacturing work. According to NERA, these losses and their impact on the manufacturing sector outside the manufacturing sector would have lost 6.5 million by 2025 and 2040 in 2040.
The loss of jobs will result in a corresponding decline in gross domestic product, with a loss of $ 250 billion by 2025 that will accelerate to $ 3 billion by 2040.
“The decline in GDP accelerates over time as the targets become much more difficult to meet and the targets begin to limit production in all sectors,” the study says.
However, the authors of the study note an important caveat to their key findings that Trump and Christian omit. Not only did the study subject a large degree of uncertainty to the long-term forecasts, but the study did not affect all of the compensatory job gains and GDP growth associated with a clean technological transition.
In a news release following Trump’s announcement of the US withdrawal from the Paris Agreement, NERA said that ‘the Trump administration has used selective results’ from its study.
“NERA’s study was not a cost-benefit analysis of the Paris Agreement, nor is it considered to be one,” their statement read. ‘The aim of the study was to estimate the extent of cost sensitivity associated with achieving deep US emissions targets among alternative implementation approaches affecting the US industrial sectors. NERA’s study does not contain any recommendations regarding any specific international agreements. ”
There are some predictions about how climate action will create opportunities for economic growth. A 2018 report by the Global Commission on the Economy and Climate – an economic policy initiative commissioned by seven countries in 2013 – states that by 2030, the green transition could bring $ 26 billion in benefits to the global economy. And as new technologies accelerate the transition, new jobs can be created with it.
When asked about the possible compensation of benefits in his critique of the Paris agreement, Christian questions the logic of eliminating existing energy effects while subsidizing work in renewable energy. According to the International Agency for Renewable Energy, global direct subsidies for renewable energy will increase from $ 166 billion in 2017 to $ 192 billion in 2030, while subsidies on fossil fuels will increase from $ 447 billion to $ 165 billion over the same 13-year period. daal.
“I do not see the benefit of introducing penal policies that eliminate well-paid energy jobs and then use our taxpayers’ money to create new jobs by subsidizing other less efficient forms of energy,” he said.