And better keep Bruce Willis on call for the asteroids. Sorry, couldn’t resist.
Sorry.didn't mean to to sound like a dick but according to that logic we should all prepare for black holes cause they can happen at anytime anyplace even though you can't do anything to stop it.that's real quantum physics right there
EXECUTIVE SUMMARY
NERA Economic Consulting was commissioned by the American Council for Capital Formation
Center for Policy Research (ACCF CPR) to perform a comprehensive assessment of impacts on
the overall U.S. economy in general, and on the industrial sector in particular, from regulating
greenhouse gas (GHG) emissions under existing and potential future regulations.
President Obama announced the Climate Action Plan (CAP) to address climate change through
executive action in 2013. In addition to other initiatives not requiring new legislation, it directed
the U.S. Environmental Protection Agency (EPA) to establish the first ever restriction on carbon
dioxide emissions from the electric sector. The EPA issued new rules to reduce GHG emissions
from the electric sector through the “Clean Power Plan” (CPP), claiming under authorities
granted in sections 111(b) and 111(d) of the Clean Air Act (CAA).
In addition to issuing new regulations to implement its CAP, the Obama Administration
participated in meetings in Paris at the end of 2015 that created a new framework to reduce GHG
emissions, based on voluntary “Nationally Determined Contributions” (NDC) from each country.
The U.S. pledged in its initial NDC to reduce emissions more rapidly and further than the CPP
alone would do, and in its 2016 Second Biennial Report of the United States of America(1)
(USSBR 2016) submitted to the United Nations (UN), it described in broad terms what
additional regulations would be required to achieve those goals. The USSBR 2016 provides
some options to achieve the 2025 NDC target to reduce net GHG emissions by 26 to 28%
relative to 2005 levels. The U.S. NDC from the Paris Agreement is consistent with a straight-
line emissions reduction pathway to economy-wide emission reductions of 80% or more by
2050. These long term goals of reducing emissions are detailed in the U.S.’s mid-century
strategy (USMCS 2016) (2) that envisions a deep decarbonization of the U.S. economy to 80%
below 2005 emissions by 2050.
It is widely agreed that the total potential emissions reductions from existing policies together
with planned policies announced by the Obama Administration are insufficient to achieve the
NDC pledge and would fall dramatically short of the 2050 goal. While the projected size of the
NDC emissions “gap” varies somewhat among various analyses, it is clear that such a gap cannot
be filled without contributions from the industrial sector. Accordingly, this study aims to
estimate the costs and impacts of closing the Paris NDC gap under a number of different
scenarios.
To address the study objectives, we develop a slate of scenarios to bracket the potential
economic impacts on the industrial sectors and the economy as a whole from the U.S. reducing
its GHG emissions as specified in its NDC. The scenarios employ a combination of market-
based and direct measures to restrict GHG emissions. The core scenarios are constructed so that
the U.S. as a whole ultimately meets its NDC emission target. Since the Obama Administration
has taken the course of implementing its CAP through direct sectoral regulations, rather than
broader market-based (i.e. cap-and-trade or carbon tax) measures that would require legislative
action, we design some scenarios to illuminate the impacts of feasible direct measures. In light
of suggestions that EPA could base its climate policies on Section 115 of the CAA, titled
“International Air Pollution,” we design a nationwide cap and trade program and overlay it with
regulatory programs to meet the U.S. NDC target
All the programs to be analyzed are assumed to utilize available Land Use, Land Use Change
and Forestry (LULUCF) offsets to meet the emissions target. The USSBR 2016 report on
actions to reduce GHG emissions includes high and low estimates for sequestration of GHGs due
to changes in land use and forestry that are uncertain and difficult to estimate. Based on these
estimates, we estimate two different offset potentials (average and high) that are counted toward
emission reduction targets in the study. Since this study deals only with regulations to reduce
carbon dioxide (CO2) emissions from fuel combustion, it excludes the costs of these measures to
increase sequestration and reduce other GHGs. Costs of reducing non-CO2 emissions in the
assumed amounts and of increased sequestration would be additional to the study’s cost
estimated to reduce CO2 emissions. For the core scenario assuming availability of the average
level of offsets, the overall manufacturing sector will have to reduce its emissions by about 38%
from its 2005 levels for the U.S. to meet its NDC target in 2025.
To conduct this study, we used NERA’s NewERA integrated model, which consists of a top-
down general equilibrium macroeconomic model of the U.S. economy and a detailed capacity-
planning and dispatch model of the North American electricity system. The NewERA modeling
framework captures interactions among all parts of the economy and transmits the effects of
sectoral policies throughout the economy. The model’s flexibility allows it to incorporate many
different types of policies, such as those involving industrial, energy, environmental, financial,
labor, and tax matters. The model represents five U.S. regions (four manufacturing based states
and the rest of the U.S.) and captures manufacturing at a subsector level. The model includes 16
industrial sub-sectors, of which five are energy-related sectors and 11 are non-energy sectors. Of
the 11 non-energy sectors reflected in the model, eight are manufacturing sectors and the other
three represent the non-manufacturing subsectors. The model is run from 2016 through 2040 in
three-year time steps.
We highlight below some key findings of our study for the core scenario that sets emissions caps
without trading for each of the four broad sectors – Industrial, Electric, Transportation, and rest
of other sectors – at levels to meet the overall U.S. 2025 NDC target and continue on a path of
80% reduction in emissions by 2050.
The U.S. economy could lose about $250 billion in 2025(4)
As the broadest measure of economic impact, the reductions in GDP due to costs of future GHG
regulation are notable in each of the scenarios. In the core scenario, U.S. GDP loss could be
about $250 billion in 2025 increasing to about $420 billion per year on average and a cumulative
loss of about $4 trillion between 2022 and 2031. The losses become larger in the long run as the
“mid-term” deep decarbonization target constrains the economy significantly. The U.S. economy
could lose about 6% of its GDP on average between 2034 and 2040 amounting to a loss of
greater than $2 trillion annually and a cumulative loss of $14 trillion.(5)
Availability of additional free offsets mitigate the overall impacts on the economy
Overall impact on the U.S. economy is mitigated by assumed free LULULCF offsets.
Cumulative GDP loss is reduced from about 1.1% to about 0.8% if high estimates for
sequestration of GHGs due to changes in land use and forestry are available. Having additional
offsets reduces the impacts on GDP by about 30% in 2025, and 20% in the medium to long term,
respectively. The impact even with high offsets amounts to about $180 billion in 2025, $330
billion in the medium term and $1.8 trillion in the long term. The range of GDP impact under
the different sequestration levels is shown in the figure below with the height of the bars
representing the range of impacts from high to low sequestration.
1 2016 Second Biennial Report of the United States of America under the UNFCCC, The U.S. Department of State,
2016.
2 United States Mid-Century Strategy for Deep Decarbonization, The White House, November 2016.
https://unfccc.int/files/focus/long-term_strategies/application/pdf/us_mid_century_strategy.pdf
3 The study results only reflect the least cost approach to meet emission reduction targets. It does not take into
account potential benefits from avoided emissions. The study results are not a benefit-cost analysis of climate
change. The long run, year 2040, impacts which are representative of the Obama Administration’s long term
emissions goal of an 80% reduction by 2050 are subject to a great deal of uncertainties about the future. The
model does not take into consideration yet to be developed technologies that might influence the long term cost.
The impacts estimated are based on current technology costs and availability assumed in our model.
4 The values are denominated in 2015 dollar unless mentioned otherwise.
5 The average impacts are represented as simple averages between years 2022 and 2031 and years 2034 and 2040 to
represent a short/medium and long term impacts of the policy, respectively. All impacts are estimated relative to
the baseline which is absent of the GHG policy
as the climate changes,
some areas will receive greater amounts of precipitation while others will receive less.
Floods and droughts are most important issues people face concerning climate change.
The Northern Hemisphere snow cover extent (SCE) during April was 31.17 million square km (12.03 million square miles), 950,000 square km (360,000 square miles) above the 1981-2010 average. This was the 16th largest Northern Hemisphere SCE in the 51-year period of record and largest since 2013.
...