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Economists clash over greenhouse gas reduction costs

FARGO -- The debate over how to control greenhouse gases warmed up in Fargo-Moorhead Tuesday as manufacturing and environmental interests clashed over predictions of the economic fallout.

A forum sponsored by the Chamber of Commerce featured a leading proponent of a study that predicts significant job losses will result if a leading greenhouse gas reduction bill passes.

The study, backed by the National Association of Manufacturers, predicts North Dakota would lose between 2,732 and 4,110 jobs by 2020 if the Lieberman-Warner climate change bill is adopted.

But environmental groups have assailed the study, which they say fails to count the costs of not dealing with climate change, and gives too little weight to job gains from the creation of renewable energy sources and technological innovation.

North Dakota is one of four states featuring forums like the one held Tuesday at the Fargo Holiday Inn that prominently features a study by the American Council for Capital Formation.

Margo Thorning, senior vice president and chief economist for the council, said the economic model that predicts slower growth and significant job losses could not predict how many jobs would be created from gains in renewable energy sources, including wind and biofuels.

"Our model is not subtle enough to tease that out," she said in an interview.

That lack of subtlety is one of the chief flaws of the study, said Julie Nelson, an economist with the Global Development and Environmental Institute at Tufts University near Boston.

"They only look at costs," Nelson said. "They claim that there are no benefits to be had, which is absurd."

Similarly, costs from climate change, which include more frequent and more severe droughts and floods, are real and yet left out of the calculations, said Nelson, who was at a similar forum last week in Manchester, N.H.

"All of the predictions are for more severe weather events of all kinds and these things are completely left out," Nelson added.

Thorning counters that any reductions in greenhouse gases in the United States will be dwarfed by rising emissions in China and India. The real solution to climate change therefore requires a global solution, she said.

Nelson has a different take. If America leads, other nations will follow in reducing emissions, she said. "It's a scare tactic," she said of the study Thorning is presenting. "It's a dog and pony show."

A recent Lieberman-Warner analysis by the McKinsey & Co. concluded economic growth would dip slightly by 2050 and reduce emissions by 30 percent to 40 percent through conservation and energy-efficiency gains.

The U.S. Environmental Protection Agency has come up with a range of predictions of implementing Lieberman-Warner, Thorning said, including one that reached the same slow growth and significant job losses that the American Council for Capital Formation study forecasts.

The Forum and The Dickinson Press are both owned by Forum Communications Co.