How Faulty Assumptions in Climate Predictions Could Mean Big Costs for Americans

by Kevin Mooney: Family incomes will take a severe hit and household electricity prices will jump rapidly if policymakers use the “social cost of carbon” to justify new environmental regulations, a Heritage Foundation statistician warned during a climate change conference in Washington.

Since computer climate models are grounded in assumptions about the impact of carbon dioxide emissions, the results “can be all over the map,” Kevin Dayaratna said at the Heartland Institute’s conference.

These results then can be “rigged by policymakers” to achieve their desired results, Dayaratna said during his presentation.

The Heartland Institute is a libertarian, free-market think tank based in Illinois. Its 13th International Conference on Climate Change was held July 25 at the Trump International Hotel in Washington.

Dayaratna, a senior statistician and research programmer at The Heritage Foundation, a leading conservative think tank, was part of a panel discussion on “Energy and Climate Economics” that probed the costs of the Green New Deal and the benefits of fossil fuels.

The statistical models used by the Obama administration to set regulatory policy are flawed because they are highly prone to user manipulation, Dayaratna told conferees.

In fact, only one of the three models in use during the Obama years considered potential benefits, but did so with “outdated assumptions,” he said.

President Barack Obama’s Environmental Protection Agency defined the social cost of carbon as the “economic damages per metric ton of carbon dioxide emissions.”

Climate models seek to measure the long-term impact of carbon dioxide emissions. Dayaratna and his team at Heritage’s Center for Data Analysis adapted and tested two of the three models.

After making “very reasonable changes to the assumptions in the social cost of carbon,” Dayaratna said, they found that costs could drop dramatically anywhere from 40% to 200%. And under reasonable assumptions, he said, costs could become negative and thus net benefits to society.

>>> Commentary: The Flimsy Statistical Models Obama Administration Used to Justify Environmental Agenda

Heritage Foundation statistician Kevin Dayaratna at the International
Conference on Climate Change organized by Heartland Institute.

“The sheer fact that these models can be manipulated to get any result you want speaks volumes to their uselessness in regulatory policy and the danger of putting them into the hands of policymakers,” Dayaratna said.

Dayaratna’s full talk may be viewed here.

The left’s proposed Green New Deal is the latest in a series of proposals aimed at restricting, and even eliminating, fossil fuel use to combat climate change.

On Feb. 7, Rep. Alexandria Ocasio-Cortez, D-N.Y., introduced House Resolution 109 while Sen. Ed Markey, D-Mass., introduced Senate Resolution 59. Both call for a “10-year national mobilization effort” to completely end the use of fossil fuels in the U.S. and transition the nation’s economy to so-called renewable energy sources.

But like other proposals before it, the Green New Deal is predicated on assumptions about the social cost of carbon that do not hold up under rigorous testing, Dayaratna said.

A Devastating Impact
Estimating the costs and benefits of the Green New Deal is challenging, Dayaratna said, because proponents have stated only “what their goals are” without outlining “any meaningful steps to achieve these goals.”

But in a recently published research paper assessing costs and benefits, Dayaratna and Heritage economist Nicolas Loris seize upon a carbon tax as one possible mechanism to achieve the Green New Deal’s policy goals. That’s partly because Ocasio-Cortez identifies the carbon tax as an option on her website.

The Heritage Energy Model used by Dayaratna and Loris in their study, which is based on U.S. Energy Information’s National Energy Model, also accounts for potential regulations imposed on the manufacturing industry.

What they found in their simulations of a “phased in” carbon tax is that by the time a $300-per-ton tax on carbon dioxide is reached, emissions would be reduced by only 58%.

The researchers found that a carbon tax, “coupled with government regulations and mandates,” would have a devastating impact on the American economy. By 2040, the Green New Deal would lead to an annual shortfall of 1.2 million jobs, “with a peak of more than 5.3 million jobs lost in 2023,” according to the paper.

Dayaratna and Loris also found that the typical family of four would lose an average of $8,000 in income every year, or more than $165,000 through 2040.

And, they concluded, the Green New Deal would make household electricity costs “skyrocket,” estimating these costs “would rapidly increase by well over 30%.”

In his presentation, Dayaratna stressed that the Green New Deal would not have any significant impact on the climate. Heritage’s models found that the planet would be only 0.2 degree Celsius cooler by the year 2100, and sea-level rise would slow by less than 2 centimeters.

‘Best President’ on Related Issues
Jim Lakely, communications director for the Heartland Institute, told The Daily Signal in an interview that the focus of this year’s conference was “a bit different” with Donald Trump in the White House:

The environmental left is unified in a way that it wasn’t before the election of Trump, because you now have issues on the table they didn’t expect to have on the table going back to October 2016. At that time, they felt like they had the wind at their back.

So, on our side, we felt we needed to be just as unified in our messaging and our goals. Trump is probably the best president we have had on our issues.Other conference speakers included Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, a libertarian think tank in Washington. Ebell was part of a panel discussion called “Winning Public Policy Options.”

“For us, the Green New Deal is a winning public policy option, and it is going to be the gift that keeps on giving,” Ebell said.

But he also voiced concern that the Green New Deal is spurring some Republican lawmakers to proceed with their own version of “light green” proposals, so they can appear “moderate and reasonable.”

Republicans who may be inclined to support a carbon tax should pay heed to recent election results from across the globe that suggest they would pay a steep political price, Ebell told the audience.

Government figures in Australia and parts of Canada who have advanced their own version of a carbon tax have been voted out of office, he said. And in Washington state, which he described as “a rather green state,” voters defeated a carbon tax proposal.

Trump’s Success on Energy Front
“There is an alternative to the Green New Deal and it’s called the Trump deregulatory agenda, and it’s working,” Ebell said.

Thanks to Trump’s deregulatory policies and tax cuts, the U.S. economy is growing at a robust clip, he said.

Those parts of the country that “stagnated and declined” under the Bush and Obama administrations, including “heartland states,” are now the faster growing parts of the nation’s growing economy, Ebell said.

Ebell credited Trump for helping to unleash America’s oil and gas resources.

“President Trump has had success on the energy front,” he said. “As a result of the shale, oil, and gas revolution and letting it loose, we are now the world’s largest producer of oil and gas.”

Ebell’s full talk may be viewed here.

The Competitive Enterprise Institute just released its own study in partnership with Power the Future, a nonprofit that advocates American energy jobs. It shows that the Green New Deal would cost households in Alaska, Florida, New Hampshire, New Mexico, and Pennsylvania tens of thousands of dollars in higher costs for energy, housing, transportation, and shipping.

Dayaratna, the Heritage statistician, suggested that too many political figures lack a sufficient appreciation for what sensible energy policy means for average Americans.

“Energy is literally the fundamental building block of civilization,” Dayaratna said. “From enabling you to light up your home, from enabling you to drive your car, to enabling this very conference to operate. Energy has literally become the basis of anything and everything we do.”

“Unfortunately,” he said, “many people, particularly lawmakers, take the concept of energy for granted.”
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Kevin Mooney (@KevinMooneyDC) is an investigative reporter for Heritage Foundation's The Daily Signal.

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