Cutting emissions, cutting costs

A New York Times (NYT) article highlights a recently published report by McKinsey & Company which says the United States could cut greenhouse gas emissions by 28% "at fairly modest cost and with only small technology innovations." NYT reports the study finds reductions implementations "would more than pay for themselves in lower energy bills for industries and individual consumers."
There are a significant number of options where the long-term savings in terms of lower operating costs and/or lower energy usage levels outweigh the initial costs of adoptions. In simple terms, the savings outweigh the costs and significant GHG abatement can be achieved.
The study was sponsored by DTE Energy (the parent company of Detroit Edison), Environmental Defense, Honeywell, National Grid, the Natural Resources Defense Council, Pacific Gas & Electric and Shell.
Achieving these reductions at the lowest cost to the economy, however, will require strong, coordinated, economy-wide action that begins in the near future.
Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?
(November 29, 2007, pdf, 107pp/4.11MB)

executive summary (pdf, 10pp/460KB)

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Rising health costs affect health care use

The Employee Benefit Research Institute (EBRI) recently published its 2007 Health Confidence Survey. Its major findings:
  • Most Americans getting hit with higher health costs: 63 percent with health insurance coverage report an increase in their share of costs.

  • Effects on household finances: These increases have hurt household finances, in particular, a decrease in contributions to retirement and other savings and difficulty paying for basic necessities and other bills.

  • Wellness programs supported in concept: Although 82 percent are positive about wellness programs in general, they are less comfortable with specific programs that employers might offer, and are suspicious of employer motivations for offering these types of programs.

  • Unhappiness with the health care system: 60 percent rate the health care system as fair or poor; many feel the health care system needs a complete overhaul (24%) or major changes (47%).

  • Strong support for employer mandate: 91 percent support an employer mandate. 42 percent believe that all employers, regardless of size, should be required to provide and contribute to health insurance coverage for their workers.

2007 Health Confidence Survey (pdf, 12pp/144kB)



Curbing Internet gambling

The Congressional Research Service (CRS) recently reported on proposed regulations to implement the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), Title VIII of the SAFE Port Act, PL 109-347 (pdf, 80pp/228kB), 120 Stat. 1952. The regs identify five payment systems in which to interdict the flow of illegal Internet gambling proceeds: cards systems, money transmission systems, wire transfer systems, check collection systems, and the Automated Clearing House (ACH) system. The report notes that except for financial institutions that deal directly with illegal Internet gamblers, tracking revenues in wire transfer, check collection, and ACH systems is not currently feasible.

CRS cites three bills introduced in the 110th Congress to augment UIGEA: the Internet Gambling Regulation and Enforcement Act of 2007, HR 2046 (pdf, 26pp), Internet Gambling Regulation and Tax Enforcement Act of 2007, HR 2607 (pdf, 4pp), and the Skill Game Protection Act, HR 2610 (pdf, 6pp).

Unlawful Internet Gambling Enforcement Act and Regulations Proposed for Its Implementation, CRS Report RS22749 (pdf, 6pp/72kB, from Open CRS), November 1, 2007

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Recent CBO reports

Testimony on Approaches to Reducing Carbon Dioxide Emissions       (pdf, 16pp/116kB), Nov. 1, 2007

The Director of the Congressional Budget Office (CBO) testified before the House Budget Committee on reducing CO2 emissions. He advocated an incentive-based approach as more economically efficient than "command-and-control" policies. Two main incentives would be taxes (to regulate the price of emissions) or a cap and trade system (to regulate the quantity of emissions). Of the two, a "well-designed tax would yield higher net benefits."

The Long-Term Outlook for Health Care Spending
      (pdf, 35pp/552kB), November 2007

This study gives CBO's projections of health care spending over the next 75 years under current federal law. In view of rising health costs, CBO assumes that employers, households, and insurance firms, to avoid reducing consumption of other goods and services, will change their behavior, e.g., higher cost sharing, increased utilization management, reduced insurance coverage by employers, and greater scrutiny of new technologies.

See related FR post, "Medicare and nursing homes" (8/1/07)

Long-Term Unemployment (pdf, 34pp/476kB), Oct. 2007

Unemployment lasting more than six months has increased. This report examines such long-term unemployed workers during 2001-2003 - their characteristics, sources of income, and subsequent activities.

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State business climates

In October the Tax Foundation published a report comparing states' tax systems in attracting new businesses and generating economic growth. The report says state lawmakers "are often tempted to lure business with lucrative tax incentives and subsidies instead of broad-based tax reform." If a state resorts to the former, "it is most likely covering for a woeful business tax climate. This can be a dangerous proposition." Instead, the authors advocate improving a state's business tax climate for the long term and propose that lawmakers remember two rules:
1. Taxes matter to business. Most importantly, taxes diminish profits. That cost is passed along to consumers, workers, or shareholders. Thus a state with lower tax costs will be more attractive to business investment, and more likely to experience economic growth.

2. States do not enact tax changes in a vacuum. Every tax law will in some way change a state's competitive position. Ultimately it will affect the state's national standing as a place to live and to do business.
The report's index is based on five component indexes: corporate tax, individual income tax, sales tax, unemployment tax, and property tax. Hawaii ranks 22nd overall.

The mission of the Tax Foundation, a nonpartisan educational organization founded in 1937, is "to educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government."

2008 State Business Tax Climate Index (pdf, 64pp/2MB)

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Update on extended sentences in Hawaii

Our Oct. 25 post on hate crimes noted that §706-662, Hawaii Revised Statutes, on extended sentences was deemed unconstitutional by the Hawaii Supreme Court "because it authorizes a court, rather than a jury, to make the finding that an extended term is necessary." In the recently concluded Second Special Session of the 2007 Hawaii Legislature, that defect was remedied by the passage of HB2 that became Act 1 (pdf, 14pp.) on Oct. 31. Act 1 requires a jury to determine facts necessary to impose an extended term of imprisonment unless the right to jury determination is waived, in which case determination is to be made by the court.

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