US Climate Bill Spares Consumers From Huge Cost Increase
A key climate change bill passed by Congress would mean a modest increase of annual energy costs for families, which is way below some industry estimates, according to an unofficial report from the Energy Information Administration (EIA).
The bill for a typical household’s energy costs would increase less than $150 dollars per year by 2030, or about 23 cents per day, and $583 more in 2030, if it were to go into effect.
The projection from the EIA is comparable to those made by the Congressional Budget Office and the Environmental Protection Agency, and differs greatly from the estimates by energy and business trade groups that claimed consumers would be charged thousands of dollars more yearly with the new plan to fight global warming.
According to the EIA, the bill "increases energy prices, but effects on electricity and natural gas bills of consumers are substantially mitigated through 2025 by the allocation of free allowances to regulated electricity and natural gas distribution companies."
However, it did forewarn that "both wholesale and consumer energy prices would rise quickly in the first four years, level off for the next 10 years and then sharply rise for the last five years."
EIA also found that gasoline prices would increase on average by 20 cents per gallon by 2020 and by 35 cents per gallon in 2030, according to a draft analysis obtained by Reuters. The agency said it will release the final version of the report soon.
However, clean technology is expected to offset these costs.
"The evidence is now overwhelming that this clean energy legislation is both affordable and effective," Democratic Representatives Henry Waxman and Edward Markey, who co-authored the climate change bill, said in a statement.
"American clean energy will grow substantially, and so will clean energy jobs that can’t be shipped overseas."
A great deal of the discussion and disagreement on climate change legislation has revolved around the possible economic impact of creating a system that would limit carbon emissions.
Those in favor of such legislation, such as Democrats and other supporters, have pushed the plan as an effective way to boost a sluggish economy. Opponents of the bill consider it to be a “job killer” that would burden Americans with excessive energy costs.
Jeremy Symons, who oversees the National Wildlife Federation’s climate change program, noted that the EIA’s analysis reveals that industry claims suggesting efforts to fight global warming would significantly raise energy costs "are completely unfounded and simply scare tactics."
At the request of the House Energy and Commerce Committee, the EIA went over the impact the climate change bill would have on people.
In June, legislation was passed to reduce carbon emission from utilities, manufacturers and other by 17 percent by 2020 and 83 percent by 2050, from 2005 levels.
Emission levels would be lowered through a cap-and-trade system that requires a U.S. company to have a pollution permit to emit one ton of carbon dioxide and other greenhouse gas emissions each year.
The carbon permits are expected to cost $32 per metric ton in 2020 and $65 in 2030, the EIA said.
Companies using cleaner energy and succeeding in reducing their emissions, could actually sell their permits to companies with higher emissions.
On Tuesday, another report stated that the Government Accountability Office said that "consumers will bear most of the costs of a cap-and-trade system because most regulated entities will pass along their increased costs in the form of increased prices."
It also added, "These costs could be largely offset depending on how revenues are used."
The climate change bill is likely to be revealed by the U.S. Senate in September, once lawmakers return from their summer recess.
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