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EPA Analysis Says Climate Bill’s Cost for Households Would Be ‘Modest’

All the attention on the energy front today is going to the BP spill, but the Environmental Protection Agency quietly released its long-anticipated analysis of

Luke Evans
News
Last updated: Jul 31, 2020 | Jun 16, 2010

All the attention on the energy front today is going to the BP spill, but the Environmental Protection Agency quietly released its long-anticipated analysis of the Kerry-Lieberman climate bill (PDF). The verdict? Much like its counterpart in the House, the bill would impose a “modest” cost on American households, to the tune of $79 to $146 per year (averaged over the period 2010-2050).

The Kerry-Lieberman bill itself appears all but dead, but the timing of the analysis is still critical, as Senate leaders are deciding whether or not to include carbon-capping provisions in the energy bill they hope to debate this summer. The pricetag predicted by the EPA will allow them to claim that the cost of the legislation will be less than a postage stamp a day for an average household. But as Eric Pooley points out several times in his new book “The Climate War,” “it’s not that expensive” just isn’t a very persuasive argument. Instead, Democrats will need to convince the public of the bill’s benefits — and that’s an area where the EPA analysis won’t help much.

David Roberts has a good rundown of the key findings by the EPA today:

  • The impact on U.S. consumers will be “modest.” Says the report: “Average household consumption is reduced, relative to the no-policy case, by 0.0-0.1% in 2015, by between 0.0-0.2% in 2020, by 0.2-0.5% in 2030, and by 0.9-1.1% in 2050.” Averaged over 2010-2050, households will pay an extra $79 to $146 a year. Not exactly a steep price to pay to avoid catastrophe. (Incidentally, overall household consumption will continue to rise, even with the mild constraints of the bill.)
  • ** EPA’s analysis only measures costs; it does not measure benefits. Specifically, it does not include the benefits of avoiding climate change. **If you think that’s absurd, well, you’re right. As Michael Livermore wrote last week, the “all costs no benefits” method of analysis utterly distorts lawmakers’ perspectives. Obviously if the costs of unrestrained climate change were included, the bill would look like a screaming bargain.
  • Energy-intensive and trade-expose industries are held harmless. To quote: “the allowance allocations in H.R. 2454 [which are roughly the same as APA's] can essentially eliminate any adverse effect that a cap-and-trade program would otherwise have on energy-intensive trade-exposed industries’ international competitiveness, and can thereby prevent emissions leakage that might otherwise arise if such a program were to reduce the competitiveness of U.S. industry.”
  • Offsets hold the cost of compliance down, but the limits on offset use are never reached. Overall, domestic offsets would account for about 18 percent of total reductions, and international offsets would account for another 18-29 percent, depending on how many are used.
  • Several key provisions are not included in the EPA model. These include, for example, “lighting standards, new regulation for offshore oil and gas extraction, powering vehicles with natural gas provisions, and GHG tailpipe standards.” For these and many other reasons, “uncertainties remain that could significantly affect the results” of the analysis. (What EPA won’t say: this kind of modeling is worth about as much as throwing darts at a dartboard.)
Luke Evans | My name is Luke Evans, and I work as a Web Developer. I am a professional coder and programmer who enjoys contributing to the exciting technical advancements. In 2016, I received a Bachelor's Degree in Software Development from California Institute of Technology. For my outstanding academic performance and leadership abilities while in school, I received the Edmund Gains Award in 2015.

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