By Jim Snyder - 08/03/09 08:21 PM EDT
The EIA, the division of the Energy Department that tracks and analyzes energy data, found that impacts on energy costs would be relatively modest, at least in the near term. The move by bill sponsors to give away pollution allowances rather than selling them appears to be a good one; the EIA credits the free distribution of credits with keeping energy costs from rising precipitously, according to a draft copy of the report reviewed by The Hill.
The climate bill requires a 17 percent reduction in covered emissions by 2020 and an 83 percent cut by 2050, relative to a 2005 baseline.
Supporters of climate legislation said the EIA study showed that Congress can curb greenhouse gas emissions without destroying consumers’ pocketbooks.
“The EIA study is more good news that shows that the American Clean Energy Security Act is affordable and effective,” said Jeremy Symons of the National Wildlife Federation.
Some business-funded studies have painted a darker picture. A CRA International study commissioned by the Black Chamber of Commerce said the climate bill could reduce an average household’s budget by as much as $1,600 a year.
Longer term, EIA’s analysis also gets a bit bleaker. Once the period during which pollution allowances are distributed free of charge ends, energy prices would increase at a faster clip, the EIA found. The impact will be largest on electric bills.
By 2030, electricity costs could be 20 percent higher than they would be if utilities did not have to comply with a carbon cap. And costs could be higher in the short term as well, if a carbon offset program that can help utilities meet their emissions targets is delayed.