How Much Will Americans Pay to Save the World
A recent Washington Post poll asked Americans how they would feel about cap and trade under some different cost scenarios. Turns out that if the monthly cost is $10, 56 percent support cap-and-trade and 42 percent opposed it. But when the cost is $25 per month, sentiment shifts to 44 percent in favor and 54 percent opposed. That’s pretty stingy of the American people. But Nate Silver drew a little chart which indicates that if the voters accurately understand the costs involved in the Waxman-Markey bill they ought to support it:
But of course “if the voters accurate understand” is a high bar to cross. And it doesn’t help when CNBC hosts Warren Buffett complaining about Waxman-Markey’s allegedly devastating impact on the poor. It’s true, of course, that Buffett is extremely wealthy and therefore deserves to be treated as an authoritative voice on all subjects. But the Congressional Budget Office, which actually did a detailed analysis of the distributive consequences of Waxman-Markey, concluded that the bill would have a positive impact on the poor even if you ignore the benefits of averting catastrophic climate change.
That said, Buffett is a lot richer and more famous than Doug Elmendorf, so I think it makes sense to pay more attention to his uninformed surmises than to the CBO’s analysis.
27 Responses to “How Much Will Americans Pay to Save the World”
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June 26th, 2009 at 1:52 pm
World population, now 6.8 billion, will grow to 9.2 billion by 2050. Maybe Waxman-Markey fans can figure out long it will take for population growth to nullify the impact of the bill.
June 26th, 2009 at 1:58 pm
As Nate (honestly) points out, and Ezra (dishonestly) ignores, the question is worded “What if a cap and trade program significantly lowered greenhouse gases but raised your monthly electrical bill by 10 dollars a month – in that case would you support or oppose it?”
As we all know, no program that raises monthly electricity bills by $10 or $25 will “significantly lower greenhouse gases”. Indeed, we know that Waxman-Markey will have virtually no effect on greenhouse gases.
So this question is based on a false premise.
If the question were accurately worded, it would state, “What if a cap and trade program had virtually no effect on greenhouse gases but raised your monthly electrical bill by 10 dollars a month – in that case would you support or oppose it? I’m guessing the percentages supporting the tax would be much lower.
June 26th, 2009 at 2:02 pm
But the Congressional Budget Office, which actually did a detailed analysis of the distributive consequences of Waxman-Markey, concluded that the bill would have a positive impact on the poor even if you ignore the benefits of averting catastrophic climate change.
Except that the CBO ALSO ignored the effects of the program on GDP – which would be obviously lowered signficantly by the plan. So only if you ignore *the most important costs* of the plan is it good for the poor. When you actually take a look at the costs of the bill, it will be devastating on the poor.
June 26th, 2009 at 2:12 pm
Obviously.
June 26th, 2009 at 2:14 pm
The egos on these “save the world” proponents is breathtaking. The only question that exists is will the realists allow these people to save face when AGW is finally seen as the joke that it is. We will see.
June 26th, 2009 at 2:16 pm
As we all know.
June 26th, 2009 at 2:17 pm
Stalin liked to use “It is well-known that…”
June 26th, 2009 at 2:19 pm
I don’t understand how this plan significantly lowers GDP. Can you explain please, Al.
June 26th, 2009 at 2:20 pm
Yglesias constantly writes about the cap-and-trade debate as though the US legislation is guaranteed to “avert catastrophic climate change”. Well, it’s not. Only if the US action is accompanied by big emissions cuts all around the world will we avert the harms of catastrophic climate change. The US legislation is merely a first (and probably necessary) step toward that goal. (Nor do we clearly know the magnitude of the likely harms from business-as-usual emissions.)
June 26th, 2009 at 2:22 pm
Stalin liked to use “It is well-known that…”
He also liked to nationalize major manufacturing companies. Hmmm.
June 26th, 2009 at 2:25 pm
Global warming is a giant myth. It’s well known that thirty years ago every scientist was telling us the world was going to end because we were all going to freeze to death. And now this! Stupid idiot ignoramuses, who are the pawns of Stalinist Communists who want to nationalize GM and destroy it by government legislation!
Keep up the good fight, judd and Al!
June 26th, 2009 at 2:26 pm
So how does it feel to be hidden behind the frontpage, posting real issues, and always being upstaged by the an endless parade of ignorance, posts about the repug backwash all day long, each and every day.
TP = Trivilization of Politics.
Some interesting things here, but clearly no one clicks past the garbage on the front page!
June 26th, 2009 at 2:27 pm
I guess pumping more and more CO2 into the atmosphere could cause serious environmental problems and maybe it already has caused environmental issues. I guess there are things countries can do to address this issue. I guess a cap-and-trade effects on energy demand (at least for businesses if not for households looking at 14$ more per month) and energy efficiency could be useful for this. But how high a priority should it be for Obama? Is all of this wheeling and dealing necessary when it may end up costing support on reform of health-care (or when he already wheeled-and-dealed for the stimulus and issues related to the bailout)?
June 26th, 2009 at 2:29 pm
http://wattsupwiththat.com/2009/06/25/online-global-warming-study-censored-by-epa/#more-8907
It seems the EPA is censoring data that undermines the politics of cap and trade. I thought science and transparency and not ideology were the new rules at the EPA. It appears not.
June 26th, 2009 at 2:31 pm
It seems like it would be cheaper for the Government just to start building alternate energy power stations using multiple technologies to see what will work. Such as the windmill kites flying a 30,000ft, tide machines, Alge ponds that produce bio-deseil, etc……
Then sell off, at auction, the working facilities to private industry. Take the proceeds and keep pushing the envelope on new technology.
Private investment will then follow by investing in the technologies that have been proven to work.
June 26th, 2009 at 2:56 pm
Anytime the obvious, simple, economically sound idea (carbon tax) is superceded by a complicated, manipulatable, economically vulnerable idea (cap & trade), you can bet some big money is behind it.
How much does Goldman-Sachs stand to make from trading carbon rights futures and how much of the money will be diverted to speculators?
June 26th, 2009 at 3:00 pm
This whole thing is so dishonest as to be laughable. There will be no global impact from this, because other large industrial nations are not going along with it, and have been very clear about not going along with it.
The costs will all fall on the US, and, given the economic impact, passage will bring a cry for protective tariffs to prevent the huge bleed in jobs and industry.
If you wanted to set up a rerun of the 1930 Smoot/Hawley tariff, this is a great start to the process. If you had anything else in mind, it’s just useless.
June 26th, 2009 at 3:00 pm
My favorite part of the whole article is the snarky recognition of the one indisputable truth about the U.S. – “It’s true, of course, that Buffett is extremely wealthy and therefore deserves to be treated as an authoritative voice on all subjects.”
June 26th, 2009 at 3:07 pm
How much does Goldman-Sachs stand to make from trading carbon rights futures and how much of the money will be diverted to speculators?
You may want to ask Al Gore.
June 26th, 2009 at 3:08 pm
Buffet has made a living off bubble economic growth and trading in public entities. It is natural for him to oppose anything that can have a negative effect on big business’ bottom-line such as cap & trade.
But I think your point about the CBO actually objectively analyzing the law vs. Buffet just fearmongering is very important.
In the world of Wall Street and CNBC, the only thing that matters here is what the old man has to say.
June 26th, 2009 at 3:12 pm
Buffet is (or was) a major stockholder in Moody’s. Of the dishonest credit ratings which led to our current financial condition. Why anyone pays attention to him anymore is beyond me.
June 26th, 2009 at 3:46 pm
How much is Goldman Sachs or Morgan Stanley’s cut? Their carbon trading desks stand to profit handsomely, especially if they can whip saw carbon prices like energy futures.
June 26th, 2009 at 3:54 pm
Why anyone pays attention to him anymore is beyond me.
Like Obama?
June 26th, 2009 at 4:26 pm
Not very.
Simple answers to simple questions.
June 26th, 2009 at 11:12 pm
Warren Buffet is the principal of Berkshire-Hathaway, a privately held company that is the sole owner of Mid-American Energy Holdings, one of the largest utility holding companies in America. The last time I checked at carma.org Mid-American was reported to use 93% fossil fuels.
I think that Mid-American Energy Holdings will convert most of their coal-fired electric generating plants to natural gas and seek 15% rate hikes from every state’s utility regulating board besides. Hardly onerous to their returns.
I think that ACES will result in a redistribution of domestic income away from concentrated big oil and coal industry, toward smaller firms across many more sectors from agriculture and forestry to home construction. Even if GDP were to decline slightly, most people will be better off because production and adaptation will be more widely distributed.
June 28th, 2009 at 3:11 am
No one becomes the richest man in the world with the ethnical boundaries the average person has to promoting personal busniness interests. In general, Buffett never has and never will be left of the rather right us center. Hes just left of some rich mad man.
That graph misses the social redistribution elephant. Richer people have a lower marginal utility of money and are more interested in rather secondary consumption such as a clean environment.
The simple solution is to start a negative income tax and increase it by an apropiate amounth whenever a tax with good incentives but negative redistribution effect get introduced (be it personal health sins, environmental damage or just a general vat).
June 28th, 2009 at 6:41 pm
The market is an economic technology; capitalism is a social system that says that those successful at the Market Game—as opposed to the Religion Game, the Accumulating Sex Partners Game, the Science Game, the Politicking at Party Meetings Game—are the over-arching W1NZ0RZ, and that in fact all other games are best subsumed to the Market.
Now, I actually think that Warren Buffett is better situated to comment on economics issues than (say) the Archbishop of Canterbury, since getting where he has has involved a much greater amount of rational thought and observation of the actual world, or the late Wilt Chamberlain, since seducing women has little to do with that either…but it is capitalism that makes him an authority on everything.
(I mean, some of this is always true…see http://www.stlyrics.com/lyrics/fiddlerontheroof/ifiwerearichman.htm, but actually I think that back in the shtetl a poor rabbi would have more social authority on religious matters than a rich merchant….)