Morning Bell: A Pro-Growth, Pro-Nuclear, Energy Alternative

Conn Carroll / June 11, 2009

Last month, the Heritage Foundation’s Center for Data Analysis released a study of the Waxman-Markey energy tax bill showing that by 2035 it would raise electricity rates 90 percent, reduce aggregate gross domestic product (GDP) by $7.4 trillion, and destroy over 1,900,000 jobs. The Natural Resources Defense Council recently responded with a critique of our analysis, claiming we “concealed” the fact that GDP would actually grow under the Waxman-Markey bill.

This is just plain false. Of course the U.S. economy would still grow under Waxman-Markey… it will just grow a lot slower (and produce a lot fewer jobs) than it would have otherwise. The question decision-makers must face when considering any change in policy is: What are we sacrificing when we choose one action over its alternative? In economics, this basic concept is called “opportunity cost.” But the NRDC explicitly urges readers to ignore fundamental economic thinking: “Do not accept a ‘how much less GDP is relative to no policy’ answer.”

That is not even the most galling aspect of their critique. The NRDC then goes on to cite the Environmental Protection Agency’s lower cost estimates as evidence that the CDA’s estimates are too high. But to keep their cost estimates so low, the EPA study assumes a doubling of nuclear power by 2035 … an assumption the NRDC has previously attacked! Apparently, audacity is contagious on the left. (more…)