In his column today, Paul Krugman notes that the measures needed to limit the damage from global warming are projected to slow the annual growth rate over coming decades by approximately 0.05 percentage points. As Krugman correctly points out, this impact will be virtually imperceptible and there are good reasons for believing that the growth impact of measures to reduce greenhouse gas (GHG) emissions would be even smaller. It is worth noting that conventional economic models (the same ones that show slower growth due to measures to reduce GHG) show much larger reductions in growth from the increases in military spending that we have seen over the last decade. With virtually no exceptions, political figures and newspaper columnists have viewed these larger economic costs as being too trivial to even mention.
--Dean Baker
