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STATEMENT BY JOHN SHLAES, EXECUTIVE DIRECTOR, GLOBAL CLIMATE COALITION

 WASHINGTON, Feb. 2 /PRNewswire/ -- The following is a statement by John Shlaes, executive director of the Global Climate Coalition:
 Over the last several months we have sent several reports or policy papers about the desirability of taxing carbon dioxide emissions to help the environment. Whether called a "green fee" or a carbon tax, these proposals all boil down to the same thing -- yet one more tax on the United States economy and the American taxpayer. And in addition, these taxes provide little or no environmental benefit in terms of the debate over global climate change.
 The Environment
 The Global Climate Coalition was organized almost four years ago as the leading voice for industry on the global climate change issue. We are concerned that carbon taxes are often promoted on the basis that they offer significant environmental benefits. What must be made clear is that carbon taxes will have little, if any, impact on global carbon dioxide emissions. First, there is a growing debate on the veracity and reliability of the computer models that predict so- called global warming. Recent satellite and other scientific data appear to contradict model predictions. Policy makers must weigh the cost of a carbon tax "solution" against a changing understanding of the "problem." Second, once any country imposes a carbon tax, carbon intensive industries will likely migrate to countries or regions without such a tax. Third, even if emissions in Europe, the United States and Japan were stabilized at 1990 levels, the resulting reduction in overall emissions is scientifically meaningless. Atmospheric levels would continue to rise, and the delay in any potential temperature increase would only be a few years.
 Fourth, stabilization efforts in developed nations alone are not enough to significantly reduce global greenhouse gas emissions. All predictions show that the majority of future greenhouse gas emissions will come from developing countries as their economies and populations grow. Developing countries, therefore, will need energy, modern technologies and the assistance of industrialized nations to ensure their economies grow in an environmentally sound manner.
 The United States and other developed nations must be in a position economically and strategically to offer developing nations the assistance and technology they will require. A carbon tax seriously jeopardizes our economic health, and thereby our ability to follow the best path to adapt to and mitigate potential global climate change. These are problems that will be left unsolved by calls for a carbon tax.
 For Americans, a carbon tax is essentially a surcharge on fossil fuel use, which would mean higher costs for oil, coal and natural gas. The rising cost of these fuels results in price increases in everything from home heating oil to gasoline to electricity. Because the U.S. economy is more heavily dependent on fossil fuel energy to produce goods and deliver services -- for a variety of historical and geographical reasons -- such a tax would set U.S. business at a disadvantage with its world competitors, leawhat kind of impact such a unilatera l carbon tax would have on the U.S. economy from the year 2000 through 2020. The study found that a carbon tax in the United States (significant enough to stabilize U.S. CO2 emissions at 80 percent of 1988 levels by the year 2020) would mean an eight-fold increase in the price of coal and a two-fold jump in oil and natural gas prices. It also would result in a loss of about 600,000 U.S. jobs. Most of these jobs would be lost in high-wage industries where unemployment is already a problem, including steel, mining, energy and automotive. Moreover, actual Gross National Product (GNP) would fall by 4.6 percent by 2010. Furthermore, shifts in trade patterns, as U.S. producers struggle under tax burdens much heavier than those of their international competitors, would be devastating to the United States position in world markets.
 A recent study by the Brookings Institution confirms the negative economic impact a carbon tax would have on the U.S. economy, whether imposed unilaterally or across the OECD. One significant consequence of such taxes is a shift of carbon-intensive activities to countries without a carbon tax, thereby limiting or negating the desired effect of such a policy.
 Clearly, these forecasts should give pause to any policy maker considering a carbon tax. After two decades of discussion -- from Stockholm to Rio -- the message should finally be getting through that strong economic growth is a prerequisite for continued environmental protection. However, even as more policy makers, both at home and abroad, understand this, we continue to see reports from a number of advocacy groups pushing for drastic carbon taxes that could damage, if not destroy, our long-term ability to adapt to or mitigate potential global climate change.
 We have made a few reports available today that we felt are representative of the economic analysis now underway, not because we favor any particular finding. A number of reporters have indicated it would be useful to make some of these reports available and we, of course, hope it will help to broaden the dialogue.
 Shlaes is the executive director of the Global Climate Coalition, an organization of business trade associations and private companies established in 1989 to coordinate business participation in the scientific and policy debate on global climate change issues.
 -0- 2/2/93
 /CONTACT: Lisa Franklin for the Global Climate Coalition, 202-628-3622/


CO: Global Climate Coalition ST: District of Columbia IN: SU:

KD -- DC014 -- 1916 02/02/93 13:14 EST
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