Published on December 16th, 2009 | by Susan Kraemer14
CBO Scores Senate Climate Bill – Will Save $21 Billion in First 10 Years
The newest iteration of the climate bill in congress has just been scored by the non partisan congressional budget office and, as with the previous climate bill (Waxman-Markey in the House) the Senate bill would save money. (It would cut carbon emissions too, potentially saving trillions in items like flood relief not paid out too, etc, but that is not a knowable sum, so the money saved by not destroying our climate doesn’t come into the CBO scoring.)
In scoring the Clean Energy Jobs and American Power Act, the CBO included the effects of the many counteractions that would result throughout the economy in response to pollution costs entering the equation for the first time.
One example is how much revenue might be lost to the Federal Government because more companies would be likely to replace fossil energy with renewable energy, and thus be eligible to take advantage of the 30% tax credits, reducing taxable income.
Also, a cap and trade market that would be worth about $80 billion by 2012 would allow people as well as companies to trade allowances. Homeowners who could reduce their fossil fuel use would be able to earn money, just like businesses who did the same.
Like Waxman-Markey in the House, the Senate’s Clean Energy Jobs and American Power Act would cap emissions from electricity and from other industrial activities beginning in 2012. About 7,400 facilities would be affected. Mandates would require utilities, manufacturers, and other entities to reduce greenhouse gas emissions through cap-and-trade programs and performance standards.
The Environmental Protection Agency (EPA) would regulate two cap and trade programs, one to reduce the greenhouse gases (GHGs) carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, perfluorocarbons and nitrogen trifluoride – and a separate cap and trade program to reduce hydrofluorocarbons (HFCs) a new, indirect climate risk. The EPA already runs a cap and trade program to reduce NOx and SOx (that cause acid rain) which cut both chemicals 50% in 20 years.
The costs to polluters would make it more profitable to figure out how to co-produce energy, for example with waste to energy, combined heat and power, and other technologies, or find alternatives for polluting substances. The CBO estimated that HFC pollution alone could be lowered 50% by 2020.
The bill is sponsored by Environment Committee Chairwoman Barbara Boxer. It would require U.S. emissions curbs of 20 percent by 2020 and 83 percent by 2050. The committee approved the bill with no GOP support, after many attempts to get the Republicans to even show up. After Senator Inhofe led a walkout, Senator Boxer reported the bill out of committee.
The bill would increase federal revenues by about $854 billion; and increase direct spending by about $833 billion. In other words, it would not only not add to the Federal deficit, but it would create money; reducing the deficit. About $21 billion between 2010 and 2019. More in each decade for the next four decades.
Image: Flikr user niOS
Source: Congressional Budget Office