E.P.A. makes the case for affordable climate legislation

The United States Environment Protection Agency has confirmed that the proposed climate bill could help bring down global carbon emissions at safe levels by 2050 while being affordable for American households. In an analysis, the agency concluded that the Senate bill sponsored by Senators John Kerry and Joe Lieberman would cost households an average of $79 to $146 per year.

The bill, called the American Power Act unveiled in April, aims to cut emissions of carbon dioxide and other heat-trapping greenhouse gases by 17 percent by 2020 and by more than 80 percent by 2050.

The agency’s analysis of the Senate bill mirrors the price it gave to the House of Representatives’ version of the legislation passed in June 2009. The agency previously estimated that American Clean Energy Security Act is expected to cost $80 to $111 annually.

In addition, the analysis also showed that prices for carbon permits in the cap-and-trade market outlined in the Kerry-Lieberman bill should hit $16 per metric ton to $17 per metric ton in 2013 and $23 per metric ton to $24 per metric ton in 2020.

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These prices are within range of the bill’s initial floor and ceiling prices of $12 and $25 respectively.

Possible scenarios

The E.P.A. gave several scenarios to measure the global impact of passing the climate bill in reducing emissions. One scenario assumes concerted global action, where the country follows the carbon reduction plans laid out in the Kerry-Lieberman bill at the same time as developing countries try to meet their own targets.

Developing countries, along with the United States, are also expected to follow the pledges they made during the G-8 meeting in July 2009 involving emission cuts of 80 percent below 2005 levels by 2050. In addition, the scenario assumes that these countries have already adopted a policy that caps emissions beginning in 2025 based on 2015 levels and reduces emissions to 26 percent below 2005 levels by 2050.

The agency estimates that there is a 75 percent chance of keeping global temperatures under 2°C under this scenario, which is in line with the temperature threshold by 2050 established by the Intergovernmental Panel on Climate Change.

The E.P.A. also presented a more modest scenario where developing countries’ have not started any climate policy to curb down emission until 2050. Despite this, the agency forecasted that there is still a 50 percent chance of holding global temperatures under 3°C and an 11 percent chance of holding temperatures below 2°C.


Critics complained the agency’s analysis failed to include how the bill would affect issues such as jobs, employment or oil consumption. Trevor Houser, the head of the energy and climate practice at the Rhodium Group research consultancy, argued that these kinds of modeling tend to overestimate costs and underestimate the benefits of climate legislation.

But the E.P.A. report is not the only study that looked into the effects of the Senate bill in the United States. The Peterson Institute, using a United States Energy Information Administration model, and Climate Works, borrowing an analytic model from McKinsey, have shown that the Kerry-Lieberman bill would lead to more American jobs and reduce utility costs.

Both studies conclude that passing the climate bill would create an average of 203,000 to 440,000 more jobs per year between 2012 and 2020. The legislation could also slash $35 per year from households’ utility bills through 2020, and more than $71 by 2025.

Nonetheless, some sectors were pleased with the analysis. Kevin Knobloch, president of the Union of Concerned Scientists, said that the analysis removes the last excuse senators may have for not passing strong climate and energy legislation in Congress.

«Its analysis spelled out what’s at stake if we don’t act. If Congress irresponsibly refuses to back up the commitments the administration made at the G-8 and in Copenhagen, we would send a signal to other countries that inaction is acceptable – and we would lock in some of the worst effects of global warming,” he added.

The Kerry-Lieberman bill is yet to be put on the Senate’s agenda, putting it at risk of being stalled as midterm elections loom.



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