MCMAP Charts a Blind Course to Economic Hardship

Two independent studies announced in a press conference today find serious fault with a set of climate change mitigation policy recommendations being used by Minnesota legislators to craft economic, energy and pollution control policies.

The Minnesota Climate Change Advisory Group (MCCAG) partnered with the Center for Climate Strategies (CCS) produced recommendations aimed at reducing greenhouse gas emissions in Minnesota. The resulting report, used by state policy makers is known as the Minnesota Climate Mitigation Action Plan, or MCMAP.

The MCMAP report recommends 46 policy actions with a goal of reducing Minnesota’s greenhouse gas emissions by 50 million metric tons and estimates the cost of these changes at $726 million.

Minnesota Majority, partnered with the American Property Coalition commissioned a peer review of the MCMAP report. The Beacon Hill institute, a world-renowned economic and statistical research center at Suffolk University, conducted the review. The Beacon Hill review concluded that the MCMAP report provides zero guidance to policy makers, fails to perform the most basic task of any cost/benefit analysis and that MCMAP’s cost savings estimates are not just wildly optimistic, but are the product of a purely fictitious analysis.

The Minnesota Free Markets Institute undertook it’s own review of MCCAG’s policy recommendations, and exposed further weaknesses in the plan. That analysis found MCCAG’s assumptions and recommendations for land use, transportation and agricultural policies to be unrealistic, and in some cases, contrary to recently enacted laws. MCCAG’s emphasis on increasing the cost of driving and reducing investment in roads came under particular criticism.

Members of the MCCAG group themselves have raised concerns about the MCMAP report. Will Anthony said the costs and impacts need deeper analysis. Jim Marchessault, another member and business owner expressed reservations about cap and trade, saying, “It appears to me [that cap and trade is] a hidden tax that government will force utilities to collect and raise everyone’s energy costs.”

MCCAG claims it’s recommendations will save Minnesota millions, perhaps even billions of dollars, but the MCMAP report failed to take collateral costs into account.

Were the policies recommended by MCCAG fully implemented, fuel, electricity, and construction costs will escalate and increasing ethanol mandates will drive up the cost of food. Everything from cereals, milk, eggs, cheese, beef and poultry will cost consumers more.

A study conducted by Science Applications International assessed the economic impacts of similar climate change mitigation policy recommendations. Estimates for Minnesota show some alarming costs, including gross state product losses of $4 – 12 billion, average household income losses ranging between $3,400 and $8,000 per year, heating, fuel and electricity costs more than doubling, and job losses between 33,000 and 74,000.

MCCAG proposes to take Minnesota down a road fraught with economic pitfalls without ever quantifying the supposed benefits. The costs of implementing the MCMAP plan can be quantified. The benefits are nebulous, and even the cost of inaction hasn’t yet been established, if indeed, cost is the operative. If warming is occurring, some would argue it’s an overall benefit.

Representative Mike Beard (R – Shakopee) pointed out that periods of warming have historically brought mankind the greatest periods of prosperity and longevity. “I’d rather have long life and great cathedrals than cold, disease and famine,” he said, comparing the colder Dark Ages to the 300-year warming period of the Middle Ages.

Reviews of the MCMAP plan show that the benefits (if any) of policies geared toward stopping climate change are unknown but the costs are sure to give Minnesota sticker-shock.

Resources

• Beacon Hill Peer Review
• Minnesota Free Markets Institute Policy Memo
• MCCAG Report

In the News

• Pioneer Press
• Star Tribune
• Minnesota Public Radio