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October 7, 2009

U.S. Chamber of Commerce: Between a Rock and a Hard Place?

Andy Hultgren
Project Manager
SWCA Environmental Performance Group

With high-profile members – including PG&E, PMN, Exelon, and now Apple – leaving its organization, and Nike threatening the same, the U.S. Chamber of Commerce must feel that it is between a rock and a hard place on the climate change issue.

On the one hand, many of its members seem to feel that climate change is an issue requiring immediate action.

On the other hand, the chamber apparently feels that current legislative efforts to address climate change must be stopped at all costs. Witness this recent “Action Alert” from the chamber’s grassroots project:

“Oppose Flawed Climate Change Policies in the Senate: With the House of Representatives’ narrow passage of the deeply flawed ‘American Clean Energy and Security’ Act (ACES), H.R. 2454, your opposition is needed now more than ever.

“Write to your Senators now and tell them to oppose a cap-and-trade bill that would create a de-facto energy tax on American families and result in significant economic harm…

“Tell your Senators to oppose a de-facto energy tax on American families, and instead focus on common-sense energy solutions.”

It appears that the chamber’s main concern is that climate change legislation may have a negative effect on energy prices. So what is the chamber to do? Support climate change legislation and face increased energy prices? Or continue to oppose climate change legislation and continue losing its membership?

It looks like a lose-lose situation. But is it really?

Given that the chamber publicly questioned the scientific evidence for human-made climate change and called for a lawsuit and high profile trial against the US EPA less than two months ago, perhaps they simply don’t understand the situation.

Here is what EPA economic studies of House climate change legislation have shown:

• Electricity Prices: In its core scenario, EPA found no electricity price increase in 2015 and 2020, vs. the reference case (business-as-usual) scenario. Two decades from now, by 2030, EPA found electricity prices increase by only 13 percent vs. the reference case.
• Household Consumption: Average household consumption is very minimally impacted: reduced by 0.03-0.08 percent in 2015, 0.10-0.11 percent in 2020, and 0.30-0.31 percent in 2030.
• Household Consumption Growth: 5 and 10 year average annual household consumption growth is reduced only 0.1 percent for 2015 and 2020.
• Total climate change legislation cost: $30 billion in 2020 and $213 billion in 2050.

Now, what are the potential cost implications of pursuing the business-as-usual case and doing nothing? NRDC conducted a study asking that very question, and here is what they found. If climate change is left unchecked and we pursue a business-as-usual scenario, America will face:

• Increased hurricane damage: Economic losses caused by the increasing intensity of Atlantic and Gulf Coast storms.
• Real estate losses: Rising sea levels result in damaged or destroyed real estate.
• Energy costs: Rising temperatures will have a net effect of increasing energy demand for air conditioning and refrigeration, even after accounting for the reduction in winter heating demand in northern latitudes.
• Water costs: Increased costs to provide water to the driest and most water-stressed parts of the US as climate change exacerbates drought conditions and disrupts existing patterns of water supply.
• Total cost of the business-as-usual scenario: $271 billion in 2025 and $506 billion in 2050.

According to these studies, through the climate change legislation the U.S. Chamber of Commerce so vigorously opposes, the American people and American businesses stand to avoid over $200 billion in economic costs in 2020 and nearly $300 billion in economic costs in 2050.

This fact begs the simple question: Is the US Chamber of Commerce really between a rock and a hard place, or are they simply looking in the rear-view mirror instead of focusing on the road ahead?

PG&E, PNM, Exelon, Nike, and Apple have all made their opinions clear.

Andy Hultgren is a Sustainability Project Manager with the SWCA Environmental Performance Group, and co-founder of Say it Green, which sells organic, fair trade apparel.

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