US Chamber Gun Admits GDP Would Double Under Climate Policy

Most people haven't heard of economist Anne E. Smith or the consulting firm she works for, CRA International. But she is a favorite of the US Chamber of Commerce, which is working overtime to persuade Congress that taking on global warming amounts to economic death.

The Chamber loves Smith for her presentations of the economic impacts of last year's Lieberman-Warner climate bill, which make climate policy sound like a sure-fire ticket to economic hell. Which is probably what the sponsors of the modeling - the National Association of Manufacturers (NAM) and the American Council for Capital Formation (ACCF) - had in mind.

Never mind that Smith's modeling has drawn sharp criticism from other economists for its many questionable underlying assumptions, as well as its many murkily explained ones. (Usually explaining the faults of assumptions in economic models can be tricky; in this case it isn't: CRA's model starts with the assumption that markets always work perfectly, a point with which I think many recently-unemployed and/or foreclosed-upon Americans might quibble. For more details on CRA's shoddy model, see this plain-english critique by the E3 network of economists.)

At any rate, it is not a surprise that the Chamber has featured Smith's work in a series of theatrical "forums" on climate and energy in over a dozen states. Hey, when you equate federal policymaking on climate with suicide-bombing of the US economy as the Chamber does, you have to be able to cite something to make your point.

Only it turns out that Smith herself doesn't seem to think that the road to hell is paved with the pages from a climate bill. Questioned yesterday at an AEI-sponsored discussion of green jobs, Smith admitted that her modeling actually shows that even with the climate policy in place:

"When you look out to 2050 there's a doubling of the GDP."

Wow. I'm not sure how "a doubling of GDP" amounts to the suicide-bombing induced economic meltdown the Chamber likes to portray. Was this a momentary aberration on Smith's part?  

Apparently not, since Smith went on to say that:

"The real issue isn't whether we're going to tank the economy. Its, is this something we're willing to spend for? You've got to look at what are we getting for that and is it worth doing?"

In other words, all of Smith's research and damning presentations aren't about saying we shouldn't do a climate policy, or that it will kill the economy. Rather, that we should make sure we get the best value we can.

Hmmm...I'd have to say that if the cost of getting the US to fight global warming is that we double the GDP, well, that sounds like a pretty good value to me.