The research council report says, "Broadly speaking, there are two mechanisms by which climate change has a fundamental impact on the economy." First are direct effects: droughts, floods, heat waves. Second are the economic cost of plans to cap emissions. "There will be costs, and those costs will be borne by everyone," the report says. The problem is that "our knowledge of the economics of climate change is surprisingly incomplete and imprecise."
Obama has called for setting up a cap on emissions and dividing the allowed emissions among the greenhouse-gas-releasing industries through the sale of permits. The anticipated revenue from those permits is $645 billion over 10 years. If the plan succeeds, Barnes predicts that industries and environmental groups will both want some of that money for their respective interests. He prefers giving voters monthly "stimulus checks" to offset the energy costs passed along by industries, "so taxpayers can see some benefits."