By Robert Pore

As Americans debate the pros and cons of cap and trade, it’s obvious that what concerns people the most about the proposal is that it will increase energy costs.

The fact is energy costs are going to go up whether cap and trade is passed or not. It’s a fact of life. Last year, when gasoline costs soared to more than $4 per gallon and diesel costs nearly $5 per gallon, it wasn’t a passing fancy. The cost of a barrel of oil would have soared to more than $200, but something got in the way — a global economic meltdown.

We all want the economy to improve, but a consequence of that will be higher energy costs as demand for goods and products increase.

Here’s one of the reasons why, regardless of cap and trade, energy costs will continue to soar as the world’s economy — China and India.

According to Lester Brown of the Earth Policy Institute, United States, with 5 percent of the world’s people, consumes a third or more of the earth’s resources. U.S. economic might used to count on that fact, but now, Brown said, China consumes more basic resources than the United States does.

Among the key commodities such as grain, meat, oil, coal, and steel, China consumes more of each than the United States except for oil, where the United States still has a wide (though narrowing) lead, Brown said. China uses a third more grain than the United States. Its meat consumption is nearly double that of the United States. It uses three times as much steel.

But while those numbers reflect national consumption, Brown poses the question, “What would happen if consumption per person in China were to catch up to that of the United States?”

“If we assume that China’s economy slows from the 10 percent annual growth of recent years to 8 percent, then before 2030 income per person in China will reach the level it is in the United States today,” he said.

Here’s another assumption by Brown, “If we assume that in 2030 there are three cars for every four people in China, as there now are in the United States, China will have 1.1 billion cars. The world currently has 860 million cars. To provide the needed roads, highways, and parking lots, China would have to pave an area comparable to what it now plants in rice.”

“By 2030 China would need 98 million barrels of oil a day,” Brown said. “The world is currently producing 85 million barrels a day and may never produce much more than that. There go the world’s oil reserves.”

The higher energy cost caused by China’s growth will make the project energy cost if cap and trade goes into effect look like share change.

What China is teaching us, according to Brown, is that the western economic model—the fossil-fuel-based, automobile-centered, throwaway economy—is not going to work for China.

“If it does not work for China, it will not work for India, which by 2030 may have an even larger population than China. Nor will it work for the other 3 billion people in developing countries who are also dreaming the ‘American dream.’ And in an increasingly integrated global economy, where we all depend on the same grain, oil, and steel, the western economic model will no longer work for the industrial countries either.”

For Brown, the key to change is the “overriding challenge” to build a new economy—-one that is powered largely by renewable sources of energy, that has a much more diversified transport system, and that reuses and recycles everything.

“We have the technology to build this new economy, an economy that will allow us to sustain economic progress,” he said. “Can we build it fast enough to avoid a breakdown of social systems?”

While cap and trade is far from perfect, it provides a framework to begin to achieve the change that Brown is talking about.

There’s some concern that cap and trade may be a disincentive to create that new economy powered largely by renewable sources of energy that Brown talks about.

Bruce Johnson, agricultural economist at the University of Nebraska-Lincoln, said instead of balking and saying no to everything, the question that should be asked about fossil fuel dependency and global climate change is, “What are we going to do about it?”

“Cap-and-trade, in a sense, would begin starting to put a fair price on what has been subsidized fossil fuel for a long, long time and for us, too, in Nebraska on coal,” Johnson said. “We are subsidizing coal because we are not paying for the external costs of what it is doing in terms of CO2 emissions and so forth.”

Johnson said it is only a matter of time before there’s an imposed tax on Wyoming coal coming into Nebraska power plants, with or without cap-and-trade.

“Our cheap electricity is a passing amenity that we are not going to have very much longer,” he said. “Cap-and-trade will deal with that and a partial alternative to coal is getting wind power started in Nebraska. It is a time for energy transformation and cap-and-trade is one of those things and not just another kind of tax. It is a recognition of what needs to be done policy-wise. The economy will have to adjust and it will adjust and Nebraska could be a positive player in that adjustment.”

And if we don’t begin to address climate change, specifically through adopting more renewable energy, here’s what could happen.

According to researchers at Purdue University, urban workers could suffer most from climate change as the cost of food drives them into poverty.

A team led by Purdue University researchers examined the potential economic influence of adverse climate events, such as heat waves, drought and heavy rains, on those in 16 developing countries. Urban workers in Bangladesh, Mexico and Zambia were found to be the most at risk.

“Extreme weather affects agricultural productivity and can raise the price of staple foods, such as grains, that are important to poor households in developing countries,” said Noah Diffenbaugh, the associate professor of earth and atmospheric sciences and interim director of Purdue’s Climate Change Research Center who co-led the study. “Studies have shown global warming will likely increase the frequency and intensity of heat waves, drought and floods in many areas. It is important to understand which socioeconomic groups and countries could see changes in poverty rates in order to make informed policy decisions.”

Again, cap and trade isn’t perfect and is not the only answer to addressing climate change. But something has to be done because the very thing that makes us strong will soon turn on and we will be gasping for some expensive solution that will make our current debt look mighty small unless we really want to drastically reduce our standard of living.