The Impact of the Kyoto Protocol on Economic Growth:
Tax Policies to Promote Technology and Sequestration

American Council for Capital Formation
March 30, 2000

(PDF)

My name is Margo Thorning and I am pleased to present this testimony to the Senate Committee on Energy and Natural Resources.

The American Council for Capital Formation represents a broad cross-section of the American business community, including the manufacturing and financial sectors, Fortune 500 companies and smaller firms, investors, and associations from all sectors of the economy. Our distinguished board of directors includes cabinet members of prior Republican and Democratic administrations, former members of Congress, prominent business leaders, and public finance and environmental policy experts.

The ACCF is now celebrating its 27th year of leadership in advocating tax, regulatory, environmental, and trade policies to increase U.S. economic growth and environmental quality.

We commend Chairman Murkowski and the Senate Committee on Energy and Natural Resources for their focus on the role of technology, science, and incentives in addressing climate mitigation. In our view, tax policy is key to delivery on the promise of new technology. Given the ACCF’s extensive studies on the impact of tax policy on investment, my testimony will develop an aspect of what should become the foundation for an integrated climate change policy. We believe that progress on tax proposals such as those in S. 1777, the Climate Change Tax Amendment, is vitally important.

My testimony begins with a review of the macroeconomic consequences of reducing CO2 emissions and purportedly stabilizing CO2 concentrations. It includes information from a number of analyses sponsored by the ACCF Center for Policy Research, the public policy research affiliate of the American Council for Capital Formation. These studies describe the economic costs of near-term limitations on U.S. carbon emissions and the impact of emissions limits on the growth of the capital timed climate change mitigation policy—based on accurate science, improved climate models, global participation, tax incentives to accelerate investment in energy efficiency and sequestration, and new technology—is essential, both to U.S. and global economic growth and to eventual stabilization of the carbon concentration in the atmosphere, if growing scientific understanding indicates such a policy is needed.

Read the Full Testimony (PDF)