Briefing Paper No. 44

The Costs of Reducing Carbon Emissions: An Examination of Administration Forecasts

Executive Summary

How much will it cost the United States to comply with the Kyoto protocol? The estimates range from over 4 percent of gross domestic product and $348 for the right to emit a ton of “greenhouse gases” to only .1 percent of GDP and $14 for the right to emit a ton of gases.

In the lowest cost scenarios, U.S. emitters purchase rights to emit from other countries. In the highest cost scenarios, actual U.S. emissions have to be reduced by about 30 percent from what they otherwise would be. Such a cut-back would imply a massive shift from coal- to natural-gas-fired electricity generation. But even the low-cost scenar-ios are excessively expensive because models of the atmo-sphere predict that very little warming would be prevented.

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Peter VanDoren is the editor of Regulation at the Cato Institute.