Federal Climate Change Legislation Will Help Maine to “Grow More Efficient, More Competitive and More Energy Independent”

Colby Economist Tom Tietenberg warns that the longer Congress waits to act the higher the environmental and economic costs will be
Augusta, Maine (Thursday, June 10, 2010)—The Maine Center for Economic Policy (MECEP) today released “Climate Change: Maine Makes the Case for Federal Action Now” by Colby College Mitchell Family Professor of Economics Emeritus Tom Tietenberg.  The report is the latest edition in the long-running MECEP Choices series which published its first report in 1994.

“A national climate policy that helps the state to grow more efficient, more competitive and more energy independent would level the playing field and provide the basis for a more secure and prosperous future for Maine,” Dr. Tietenberg writes.  “Leading ahead of the curve, Maine has already positioned itself strategically by developing new energy while reducing energy costs and dependency. Our experience demonstrates that current action can be cost effective and makes the case for federal action now.”

“Since the consequences of increasing emissions can be long lasting, waiting to take action would ultimately necessitate making much deeper subsequent cuts in emissions, which would cost more,” Dr. Tietenberg adds. “It is also much more expensive to concentrate more drastic cuts in the future than it is to start now, which can allow us to spread the costs over time. In other words, early action is much cheaper than delaying.”

In June 2009, the U.S. House of Representatives passed strong climate change legislation introduced by Representatives Henry Waxman of California and Ed Markey of Massachusetts.  In the Senate, Maine Senator Susan Collins and Washington Senator Maria Cantwell and Senators John Kerry of Massachusetts and Joseph Lieberman of Connecticut have introduced competing climate change bills.  The Senate is expected to debate climate change later this summer.

“All three bills contain similar emission reduction goals,” the report notes and adds that the estimated costs of each are also similar.

“In terms of who bears the costs, due to the many rebates and mandates for consumer benefits, these policies are expected to be progressive,” Dr. Tietenberg writes.  “Lower income households, with a disproportionately high energy cost to income ratio, would benefit from implementation of climate policy, as their rebates would exceed their expenditures. Higher income people, who consume much more energy, would pay more in higher energy costs than they receive in rebates.”

As Maine’s leading non-profit research and policy development organization, MECEP has advocated for strong legislation to reduce carbon emissions while easing the economic impact on working families.  Dr. Tietenberg is a former president of the Association of Environmental and Natural Resource Economists (1987-88) and has consulted on environmental policy with the United Nations, the World Bank, the InterAmerican Development Bank, the Agency for International Development and the Environmental Protection Agency, as well as several state and foreign governments.