Which economic analysis of the proposed carbon cap and trade bills do you find most plausible? : Eco Answers

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Question by Dana1981: Which economic analysis of the proposed carbon cap and trade bills do you find most plausible?
Climate and energy bills involving carbon cap and trade systems have been proposed by the US House (Waxman-Markey [WM]) and Senate (Kerry-Lieberman [KM]). Numerous economic analyses of these bills have been performed, as summarized below.

Congressional Budget Office (CBO): WM will cost about $ 175 per household in 2020, and those “in the lowest income quintile would see an average net benefit of about $ 40 in 2020. The estimate “does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change.” CBO’s estimate also does not include the economic benefits of other provisions in WM.

http://www.cbo.gov/ftpdocs/103xx/doc10327/06-19-CapAndTradeCosts.pdf

American Council for an Energy Efficient Economy (ACEEE): estimates that the WM efficiency provisions alone could save businesses and consumers $ 22 billion ($ 170 per household) annually by 2020, and that the net savings of the bill’s provisions not included in the CBO estimate would more than make up for the estimated cost.

http://www.aceee.org/energy/national/National_Summary_ACES.pdf

Energy Information Administration (EIA) on WM: the average cost to households from 2012 to 2030 (discounted) is $ 83.

http://www.eia.doe.gov/oiaf/servicerpt/hr2454/pdf/sroiaf%282009%2905.pdf

EPA on WM: $ 80-111 per year per average family.

http://www.epa.gov/climatechange/economics/pdfs/HR2454_Analysis.pdf

EPA on KL: $ 79-146 per year per average family.

http://www.epa.gov/climatechange/economics/pdfs/EPA_APA_Analysis_6-14-10.pdf

Peterson Institute on KL: “In our analysis, households see somewhere between a $ 136 increase and a $ 35 dollar decrease in annual energy expenditures, depending on future improvements in vehicle efficiency”

http://www.piie.com/publications/pb/pb10-12.pdf

Heritage Foundation: WM “Will Cost American Families Over $ 3,000 a Year” (per family of 4)

http://www.heritage.org/Research/Factsheets/Waxman-Markey-Global-Warming-Tax-...

Institute for Energy Research on KL: “Households would face a gross annual burden of $ 125.9 billion per year or $ 1,042 per household,”

http://www.instituteforenergyresearch.org/2010/06/30/new-study-kerry-lieberma...

So basically 3 government analyses put the cost at somewhere between a modest net gain for consumers, and a $ 175 per family (about $ 60 per person) per year net cost. You also have 2 oil-industry-funded organizations (Heritage Foundation has received over $ 630,000 and Institute for Energy Research has received $ 307,000 from ExxonMobil since 1998), which put the net cost at $ 1000-3000 per family.

If you don’t trust government or oil-funded analyses, the only alternative I found was the Peterson Institute for International Economics which “is a private, nonprofit, nonpartisan research institution devoted to the study of international economic policy.” If you look at their climate change page, they don’t seem to have any particular dog in this race.

http://www.iie.com/research/topics/hottopic.cfm?HotTopicID=16

Their analysis is consistent with the CBO, EIA, and EPA at between a modest net gain for households ($ 35 per year) and a net cost of $ 136 per year. Which economic analysis of the proposed carbon cap and trade bills do you find most plausible?
Deniers, I ask that you either answer the question or don’t bother ‘answering’ at all. The question is about the cost of the proposed legislation in the USA.

Best answer:

Answer by Jerry Lee
Thanks Dana, for the summary. Generally I like to take the middle course when experts disagree, and discount the opinions of industry “experts” with an economic interest. If I read correctly, that puts me in the modest cost per family camp.

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Which economic analysis of the proposed carbon cap and trade bills do you find most plausible?

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