O’Malleynomics in One Lesson
Under Governor O’Malley’s leadership, Maryland has engaged in nation-leading efforts in both addressing greenhouse gas emissions and preparing the State and its communities for the impacts of climate change. Governor O’Malley’s leadership in efforts and programs such as the Greenhouse Gas Reduction Plan, the Climate Change and Coast Smart Construction Executive Order, Marylanders Plant Trees, landmark no-net loss of forest legislation; CoastSmart Communities earned him the League of Conservation Voters Climate Change Vision Award last year.
1. CCS failed to quantify benefits in a way that they can be meaningfully compared to costs;
2. When estimating economic impacts, CCS often misinterpreted costs to be benefits;
3. The estimates of costs left out important factors, causing CCS to understate the true costs of its recommendations…
For policymakers, the CAP report offers no worthwhile guidance. The report fails to quantify the monetary benefits of reduced GHG emissions rendering its cost savings estimates implausible if not downright unbelievable. The faulty analysis contained in the CAP report leaves policymakers with no basis on which to judge the merits of the CAP report’s recommendations for action on the mitigation of GHG emissions
However, despite a significant amount of research, considerable uncertainty remains over the ultimate economic impacts of such a policy. In addition, the choice and design of the specific mitigation programs implemented will affect the magnitude and distribution of GHG mitigation costs. Policies that are not incentive-based (i.e., command-and-control) and/or do not implement economy-wide regulations will be much more costly.
The distribution of costs within the economy will depend on several key factors, including the energy- and carbon-intensity of energy consumed by each sector.
In Maryland, the manufacturing sector will likely experience a greater amount of employment and output losses relative to the rest of the economy as a result of GHG reduction policies. However, policies that attempt to mitigate these losses and exempt the manufacturing sector will only increase the total cost of GHG mitigation and shift the burden to other economic sectors. Ultimately, the cost of GHG mitigation policies, even those imposed on businesses, will be borne by individuals.