Climate control bill would cut US GDP says EPA

14 March 2008 20:48  [Source: ICIS news]

WASHINGTON (ICIS news)--Climate control legislation pending in Congress could reduce US economic growth by as much as 7% or $2,856bn (€1,828bn) annually by 2050, the Environmental Protection Agency (EPA) said on Friday.


The agency delivered a report on the possible environmental and economic impacts of Senate bill S-2191, the “America’s Climate Security Act,” to its two sponsors, Senators Joe Lieberman (Independent-Connecticut) and John Warner (Republican-Virginia), saying that in a best-case scenario the legislation would reduce US gross domestic product (GDP) by 2.4% by 2050.


Those estimates of economic loss, however, have been made on the assumption that the US will more than double its nuclear-powered electric utility capacity by that year and that still uncertain technologies for carbon capture and sequestration (CCS) will be successfully deployed on a wide scale.


In a joint statement, Lieberman and Warner cited the EPA’s best-case forecast of a 2.4% cut in GDP as evidence that their legislation would effectively combat global warming without major cost to the US economy.


“EPA’s detailed analysis indicates that eh USA can curb global warming without sacrificing economic prosperity,” Lieberman said.


Warner said: “I am satisfied that EPA’s analysis demonstrates what we have long known: You can control greenhouse gas emissions in a manner that leaves the economy whole and is not burdensome on consumers.”


However, Senator James Inhofe (Republican-Oklahoma), the ranking member on the Senate Environment & Public Works Committee, said the EPA study “exposes the Lieberman-Warner bill for what it is, a job-killer”.


“Even assuming optimistic assumptions of increased nuclear plant generation and the deployment of carbon capture and storage, Lieberman-Warner would still cost up to $983bn in 2030 with a 44% increase in electricity cost,” Inhofe said.


S-2191 would establish a mandatory cap and trade climate control programme in which US industrial and transportation emissions of greenhouse gases would be capped and then aggressively reduced to reach a level 63% below the nation’s 2005 emissions by 2050.


Under the legislation, the federal government would auction emissions allowance permits to individual companies in the manufacturing, transportation, electric power and natural gas industries.  Those companies whose plants emit less greenhouse gases than their purchased permits allow could sell excess credits to firms whose facilities exceed permitted maximums.


In theory, a cap and trade system would create an economic incentive for manufacturers and power companies to reduce their emissions.


US manufacturers, however, argued in a study issued yesterday that a cap and trade mandate would simply force more US production capacity and related jobs to foreign shores.


($1 = €.64)

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles