The Cost of Climate Action

Joan Shorenstein Center on the Press, Politics and Public Policy Discussion Paper Series #D-49, January 2009 How Much Would You Pay to Save the Planet? The American Press and the Economics of Climate Change By Eric Pooley Kalb Fellow, Shorenstein Center, Fall 2008 Contributor at Time Magazine © 2009 President and Fellows of Harvard College. All rights reserved. Introduction huge reductions in newsroom staff and making disciplined climate coverage less Suppose our leading scientists discovered likely just as it becomes most crucial. So it that a meteor, hurtling toward the earth, is well worth asking: How is the press do- was set to strike later this century; the ing on the climate solutions story? governments of the world had less than This paper attempts to answer that ques- ten years to divert or destroy it. How tion by examining coverage of the eco- would news organizations cover this nomic debate over Senate Bill 2191, the story? Even in an era of financial distress, Lieberman-Warner Climate Security Act they would throw teams of reporters at it of 2008. The economics of climate pol- and give them the resources needed to icy—not the science of climate change— follow it in extraordinary depth and detail. is at the heart of our story because the After all, the race to stop the meteor would be the story of the century. most important step toward national mobilization is putting a price on carbon When it comes to global climate change, it emissions, either through a carbon tax or, is sometimes said that we are the meteor.1 in Lieberman-Warner’s case, a mandatory The analogy is imperfect, of course. Cli- declining cap. This is the great political mate change is slow and gradual, at least test, and the great story, of our time. But for now, unfolding on a time scale that news organizations have not been treating confounds the capacities of our politics, it that way. our economics, and our journalism. Abrupt, rapid disruptions are likely, but no one can say when they may come. De- A Challenge to Reporters spite the uncertainties, climate scientists How much will it cost to begin turning have no doubt that the impact is already back the tide of climate change? In April being felt and little doubt that future con- 2008, the Environmental Defense Fund sequences will be severe to catastrophic.2 (EDF) set out to answer that question in a It is too late to “prevent” global warming, conference call for reporters covering the but it may yet be possible to avoid cata- Lieberman-Warner bill. EDF took an al- clysm. Doing so, environmental experts most paternal interest in this piece of leg- overwhelmingly agree, requires decarbon- islation, which was sponsored by Senators izing our economy—not with a meteor- Joe Lieberman (I-CT) and John Warner smashing space shot but with a broad, (R-VA), because the organization was an urgent World War II–style mobilization. architect of the market-based regulation at Intense opposition to that sort of action its heart: a cap-and-trade system that remains, in part due to fears of rising en- would limit the amount of global warming ergy costs in a carbon-constrained world. pollution U.S. industry can send into the Well-designed policies are the key to re- skies and establish a new market in which ducing emissions while avoiding price large emitters buy and sell pollution per- spikes, and public support is the key to mits, creating a profit motive for going passing those policies into law. A vigorous green. If Lieberman-Warner became law, press ought to be central to both climate it would mean the U.S. was finally joining policy and climate politics, but this is not a the rest of the industrialized world in the time of media vigor. The American press effort to slow global warming before the has been hit by a meteor of its own, a earth reaches an irreversible tipping point. secular revenue decline that is driving But no one expected the bill to pass. Al- ies to show the emerging mainstream eco- though it enjoyed support from the green nomic consensus on the issue: Though by wing of the Fortune 500—GE, Alcoa, no means cost-free, a well-designed cap- Exelon and others who see opportunity in and-trade system’s effect on U.S. eco- a low-carbon future—Lieberman-Warner nomic growth would be far less severe faced overwhelming opposition from in- than NAM’s report and other doomsday dustry lobbies such as the National Asso- models suggested. EDF’s study was not ciation of Manufacturers (NAM), which without spin; it gave scant attention to the claimed the bill could double electricity regional impacts of cap and trade, which prices, drive gasoline to $8 a gallon, de- are potentially severe for states that get stroy up to 4 million jobs, and drain as their electricity from coal-fired power much as $669 billion from U.S. gross do- plants, and presented its conclusions in mestic product by 2030.3 NAM teamed up the most favorable light. But it was honest with the American Council for Capital about that. “Let us be clear. These same Formation (ACCF), a conservative think model results can be presented in other tank, which came up with those frighten- ways,” the report stated. “Opponents of ing predictions by feeding pessimistic as- taking action will cherry-pick the largest sumptions about future economic activity numbers and focus on them—as if any into a computer model, producing a single model in isolation were a reliable doomsday forecast4 that the press re- guide to the future….They will seek to ported as news. (No economic model can scare people by presenting these figures predict the future, but NAM and ACCF alone, out of context.”9 often behaved as if they had a crystal ball, and some reporters played along.) In the The five studies analyzed by EDF sug- first six months of 2008, as the Lieber- gested that cap and trade could slow eco- man-Warner bill approached the Senate nomic growth by about one-half of one floor, the oil and coal industries spent percent of GDP by 2030, and by about $427 million on advertising and lobbying.5 three-quarters of one percent by 2050. The U.S. Chamber of Commerce, another Other credible projections of cap and opponent of mandatory C0 reductions, trade’s impact have come in slightly 2 10 held a series of “Climate Change Dia- higher, at about one percent of GDP. Is logues” around the country that spread that a lot or a little? Well, it’s clearly a the scary NAM/ACCF numbers, and ran great deal of money (U.S. GDP in 2007 a television commercial in which an actor was $13.8 trillion), but the cumulative cost cooked breakfast over candle flame and of all U.S. environmental regulation to jogged to work to show what life would date is also estimated at one percent of 11 be like under cap and trade. The coal GDP, and that has not been an insup- lobby prepared a TV spot warning that portable burden. (By comparison, the without cheap, high-carbon fuel, “We may global financial crisis of 2008—an ugly have to say ‘goodbye’ to the American reminder of how hard it is to comprehend way of life we all know and love.”6 or predict the forces that drive the economy—may have reduced U.S. GDP by The Environmental Defense Fund’s April five percent in the fourth quarter of 2008 conference call was intended to rebut alone.) A well-designed cap-and-trade sys- these claims by releasing a report7 of its tem would be a slight drag on growth, not own—one that warned, “Don’t trust any an economy killer. This is important stuff: single number,”8 then aggregated five re- not “proof” of anything, given the haz- spected academic and governmental stud- ards of economic modeling, but a clear 2 signpost amid the haze of economic un- the economy. We are at the beginning certainty. of a new debate—and we don’t have ten years to get this one right.13 Peter Goldmark, the former publisher of the International Herald Tribune who now The syndrome Goldmark describes is directs EDF’s Climate and Air Program, sometimes called “balance as bias”14 or wasn’t confident that journalists would be “he said, she said” reporting. It is a condi- able to recognize this emerging consensus. tion in which journalists stick to the role He wasn’t sure they would notice the dif- of stenographer, recording two sides of a ference between EDF’s meta-study and debate even when the two sides are not of the dire forecasts of NAM and others. He equal merit (or when there are three or knew that reporters tend to assign equal four sides). Notions of journalistic objec- weight to two sides of an argument even if tivity, Goldmark suggested, shouldn’t pre- the two sides aren’t equivalent. To give vent reporters from recognizing consen- their stories drama and a feeling of bal- sus and making judgments based on the ance, they seek opposing views even if the best available evidence. Instead, they majority of experts agree and the dissent- should help the public decide who is right ers lack credibility. A recent case in point: and who is wrong in a debate where the coverage of climate science from the mid- stakes—our economy, our planet—could 1990s through 2005, a time when a small not be higher.

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