San Francisco Chronicle Editorial - Climate Change and Federal Policy: A Response to Inaction on Global Warming

San Francisco Chronicle Editorial - Climate Change and Federal Policy: A Response to Inaction on Global Warming
The San Francisco Chronicle
By Joe Lieberman and John McCain

For too long, the debate on climate change has been at a stalemate: On one side are those calling for deep cuts in greenhouse gases, whatever the cost. On the other side are many business leaders who have downplayed the global-warming threat, fearing new regulations will cut their profits and their payrolls. The topic of global warming has become overheated with acrimony and polluted by misinformation. But the terms of the debate are skewed: Environmental protection and economic growth are not mutually exclusive. In fact, in the long run, they are mutually reinforcing. Understanding this requires that we transcend the zero-sum thinking about climate change and make the right cost comparison.

The question is not whether the costs of doing business will rise if emissions caps are imposed. The real question is how much it will cost business—and American taxpayers—in the near future if we fail to tackle this growing threat now.

The bottom line is that the potential economic rewards of confronting climate change outweigh the risks—and realizing these rewards could be the key to American industry reclaiming its global competitive advantage. It is on these terms that we have worked with both industry and environmentalists to craft the Climate Stewardship Act—the first serious, balanced, bipartisan legislation that the U.S. Senate will vote on in years as we consider the energy bill in the coming days.

The act—an amendment to the energy bill—sets real global warming targets but gives industry the flexibility and incentives to meet them. It is based on sound business principles and built on our success in controlling acid rain by creating a market for companies to trade pollution "credits" and compete to clean the air. Most important, the Lieberman-McCain climate change amendment promises to significantly reduce pollution levels that threaten our health, our environment and our economy.

Taking action to protect the environment is not cost free—but the costs of our approach are reasonable and affordable, by any measure. A recent MIT study estimated that our bill would cost approximately $20 per household, and analysts for the U.S. Environmental Protection Agency predict that the impact on our GNP would be no more than .01 percent. A second study by the independent Tellus Institute predicted that our legislation would save Americans $48 billion net by 2020 due to reduced energy demand.

Compare this to the costs of inaction. According to a United Nations' study, every ton of greenhouse gas emitted into the atmosphere costs each American up to $160 -- and we are emitting billions of tons each year. Property lost to rising sea levels, cropland lost to drought and revenues lost to dwindling fishing stocks caused by global warming also represent real costs—not to mention the immeasurable damage to Americans' health and quality of living.

If we continue to procrastinate on climate change, the price tag will only grow. Preventing pollution now will most certainly cost less than cleaning it up later, as nearly any cost-conscious CFO would admit. Don't take it from us - - ask the insurance industry. Uncertain about the potential increased liability from severe weather events and other potential effects of global warming, insurers are charging higher premiums to businesses and homeowners to cover expected higher costs. Such continued uncertainty hinders economic activity across the board, and prevents corporations and investors from making sound decisions.

Add to this the potential economic benefits from tackling global warming. Reduced global warming means reduced energy bills, freeing families to spend their earnings on other priorities. Under our plan, farmers and ranchers would be able to make money by adopting pro-environment practices. Such market-based incentives encourage the private sector to make and sell more efficient and cleaner energy technologies.

Furthermore, action on climate change will make American companies more competitive in the global marketplace. Over the next 20 years, $10 trillion to $20 trillion will be spent globally on new energy technologies. Tapping this growing market and reaping the profits demand that American companies innovate, the same as their Japanese and European competitors, who are forced to comply with more stringent environmental regulations. Action on climate change could spark an American-led revolution in environmental technology innovation.

By adopting a moderate and affordable approach to address global warming, the McCain-Lieberman Climate Stewardship Act promises to avoid the future costs of inaction by reducing emissions in a market-friendly and innovative way.

Sen. Joe Lieberman, D-Conn., is a member of the Senate Environment and Public Works Committee. Sen. John McCain, R-Ariz., is chairman of the Senate Commerce, Science and Transportation Committee.