In its Sunday Outlook section, the Washington Post sought to clarify some of the competing claims about the costs of curbing greenhouse gas (GHG) emissions. The piece did not accomplish its goal. When setting out the case that curbs on greenhouse gas emissions can do great harm to the economy, the paper quoted John Engler, who is currently president of the National Association of Manufacturers, on one of the leading bills to curb GHG emissions: "it would be like every month having a press conference announcing that you were closing another 1,000-person plant." That is intended to sound very scary. However, in normal times the economy will create close to 170,000 jobs a month. The threat of a 1000 jobs lost every month is equivalent to the number of jobs the economy typically creates in 4 hours. That is not altogether trivial, but this sort of economic impact would usually not be seen as grounds for obstructing policies that would otherwise be viewed as important. (The job loss because of the Iraq War was far greater.) The article also wrongly claims that in the long-run jobs would be lost because industry would move to countries that did not adopt limits on GHG emissions. Actually, the reason that economic models show job loss in the long-run is that by raising the cost of production, restrictions on GHG will lower the real wage. At a lower real wage, fewer people are willing to work. Insofar as industry moves overseas to evade emission restrictions, the job impact would be lessened in these models because the decline in the real wage would be smaller.
--Dean Baker