Families that are worried about climate change but also concerned about the cost of fighting it can breathe easy. Climate change legislation pending in the Senate will combat global warming and won't burden families with huge costs, the Environmental Protection Agency has found.
The Environment and Public Works Committee released the EPA's economic analysis of the Kerry-Boxer climate change bill on Friday night along with a more detailed version of the legislation. The EPA found that the Senate bill's impact would not be significantly different from the bill that passed the House in June: "[A]verage household consumption would be reduced by less than 1% in all years," and the whole package will cost households $80 to $111 per year, or 22 to 30 cents per day.
The EPA bases its calculations on a "business-as-usual" scenario. But with a different, more realistic baseline, the actual cost of the climate bill could be even lower. That's because the EPA's economic analysis cannot account for the costs of inaction. Unmitigated climate change could have a devastating on the American economy. And the EPA's modeling focuses on the legislation's cap-and-trade provisions; It doesn't account for measures like a renewable electricity standard, efficiency enhancements, and other programs meant to complement the cap.
Even with those limitations, the EPA concludes that the climate bill will produce significant environmental and energy-use improvement, with little negative impact on households:
Four key messages from the EPA analysis of H.R. 2454 would remain unchanged: (1) the cap-and-trade policies outlined in these bills would transform the way the United States produces and uses energy; (2) the average loss in consumption per household will be relatively low, on the order of hundreds of dollars per year in the main policy case; (3) the impacts of climate policy are likely to vary comparatively little across geographic regions; and (4) what we assume about the actions of other countries has much greater implications for the overall impact of the policy than the modeled differences between the two bills.
There are a few differences between the House and Senate bills. The Senate bill has a higher emissions-reduction target for 2020, at 20 percent below 2005 levels. And it also includes stronger market-stability provisions that could make the costs slightly higher, though ideally more stable. The Senate bill also allows landfill and coal mine emissions capturing to be a source of offsets, while the House bill subjected them to performance standards. But, overall, the EPA concludes that they are "relatively small differences in estimated costs and may even cancel each other out on net."