| By Clem Guttata
You know, I'm not surprised when I see misleading information in constituent emails from Rep. Shelley Moore Capito. Take this section from last week's letter (the first sentence alone gets two things wrong: one minor, one major):
WVU Report on Cap-and-Trade
Also on the topic of energy - this week, professors at West Virginia University released a report on the full-impact of cap-and-trade. In highlighting the prospect of severe job loss and population decline, their view is a bit different than the President's.
Of particular note, Dr. Randall A. Childs and the university's Bureau of Business and Economic Research suggest that the state could lose more than 20,000 jobs over the next few decades and see a $1.8 billion decline in state domestic product. These are troubling numbers and we must remember them as the conversation continues.
So, I went, looked, and found where a report authored by Dr. Childs was released (it is available for download; warning, large PDF). This report is such a hit, at Gov. Manchin's request the West Virginia legislature has even written some of its findings into law:
Whereas, The Act calls for the establishment of a national cap and trade program that, if effected, would reduce West Virginia's gross domestic product by an estimated $750 million by 2020 and by an estimated $1.75 billion by 2030; and
Whereas, West Virginia would lose up to 10,000 jobs by 2020 and up to 22,000 jobs by 2030 if the proposed cap and trade program is enacted;
Amazingly, Rep. Capito's newsletter is more accurate than the legislature's resolution! (There's a sentence I never thought I'd write.) Rep. Capito at least says "could" whereas the resolution says "would".
I share Rep. Capito's view that these numbers are troubling--but not for the same reasons.
Talking about Change
Now, before I go into details about the report itself, I want to remind you about a diary I posted a few days ago on talking about change. Here's a key chart:
What about that WVU BBER study?
Okay, fine... what's that got to do with the WVU Bureau of Business and Economic Research (BBER) study? Well, as it turns out, Childs' study focuses exclusively on just half of the decision making picture.
It says West Virginia has some good stuff right now--mainly, coal mining jobs and revenue along with electricity rates below the national average. Then it calculates how much less of the "usual" good stuff we would have if the House bill become law without any further changes and if we assume we were going to have all the same good stuff in 2030 as we have now.
In other words, it only looks at the stuff in the Resistance to Change column. No wonder the folks who like the status quo--the most resistance to change--have fully embraced this study.
What the report doesn't include
The WVU BBER report does not note that global climate change is a problem that needs to be addressed. (In fact, in the first footnote of the study, it gives credence to debunked claims of climate change denialists).
The WVU BBER report does not say what the costs of doing nothing are (it ignores the bad stuff now and in the future)--the significant costs to West Virginia of climate change. (To be fair, neither do the national government studies it relies on for much of it data.)
The WVU BBER report assumes that West Virginia's current relative electricity costs advantages will remain constant in the absence of climate change legislation. This is a difficult assumption to justify.
We're already seeing West Virginia utilities ask for large rate increases due to the drop in state industrial demand and a drop in out-of-state demand for coal-generated electricity. Multiple forecasts show a drop in Appalachian coal production in the next 20 years. Nearby states are making aggressive investments in alternative energy. Projecting the "usual" good stuff forever is an unrealistically optimistic comparison case.
Also, the WVU BBER report does not include any of the different good stuff that will result from addressing climate change. Quoting from the study itself:
The provisions excluded from EIA's analysis include: Clean Energy Deployment Program; Strategic Allowance Reserve; regulations covering HFC emissions; GHG standards for activities not covered by cap and trade; allowances to coal merchant plants; efficiency standards for transportation equipment; and, investment in energy research and development. The omitted programs and regulations, while albeit important, are not likely to significantly change the underlying results of this study.
Investments in conservation, efficiency, and alternative energy all provide benefits to the West Virginia economy. These benefits are not included in the study.
Finally, the WVU BBER report makes no attempt to include less bad stuff. A more thorough study would include the positive impacts of reduced coal usage (something that the MACED and Dr. Hendryx studies both provide a reasonable starting point to estimate).
In other words, when Rep. Capito says this is a "a report on the full-impact of cap-and-trade," that's just not true. It's a report on some of the impacts of cap-and-trade with an almost exclusive focus on the most negative impacts.
Resistance to Change
If you set out to create the most pessimistic view possible of addressing West Virginia climate change you might well end up with a study quite similar to this one. I have no reason to believe Dr. Childs' started his report with that idea in mind, but the end result is the same.
It's no wonder that Rep. Capito and Gov. Manchin are trumpeting these figures to justify their resistance to change. This is a disservice to all West Virginians.
Head in the sand on climate change. The WVU BBER report assumes the West Virginia economy will feel no effects from global climate change if it goes unaddressed. This is a reckless view to perpetuate.
All pain, no gain. The WVU BBER report assumes that West Virginia will get no benefits from the House climate bill. No new clean energy jobs. No new coal carbon-capture and storage R&D jobs (with associated increased coal demand). No retraining, tax credits, or other directed benefits to aid Appalachia in moving beyond coal.
"Good" stuff forever. The WVU BBER report assumes the status quo of coal today will be here forever. That's at odds with what the coal industry itself is saying. A real public service would be to create a more realistic baseline scenario based on all known information about coal supply.
Bad stuff never. The WVU BBER report completely ignores the documented negative externalities of the coal economy. Reductions in coal mining, processing, and burning will also have positive effects on West Virginia GDP and population numbers (along with numerous quality of life indicators).
In summary, the WVU BBER paints an unrealistic set of scary figures.
A silver lining?
As incomplete as this study is, there may be one small silver lining. While I think the WVU BBER study is misleading and inaccurate, it does demonstrate the necessity for West Virginians to constructively engage in the legislative process regarding energy and environmental policy.
It is important that climate change legislation aids West Virginians and other Appalachians who face disproportionate impacts in moving to a post-carbon economy. West Virginia political leadership--our Congresspeople and those in the state house--ought to quit demagoguing these issues and start offering real solutions.
Mining and burning the small amount of coal remaining in West Virginia even faster is not a solution to climate change in West Virginia and it doesn't address the long-term challenges our state faces to replace our dwindling coal-based wealth. |
