Carbon cap and trade costs little

I was working about the Cash for Clunkers bill (where you can exchange your old car for money voucher for a new supposedly more environment-friendly car) and it was more complicated than I thought...I need to do more research about that.

So for now let's go back to the American Clean and Energy Security (ACES) bill where a new report from the Congressional Budget Office (CBO) estimated the net overall cost per household nationwide and the net costs or benefits that would be realized by households in various income quintiles if the bill would be implemented in 2020 (based on 2010 dollar value).

The ACES bill aims to cut global warming pollution by 17% compared to 2005 levels in 2020, by 42% in 2030, and by 83% in 2050, through various regulatory measures including carbon cap and trade (or tax).

CBO examines the average cost per household that would result from implementing the greenhouse gas cap-and-trade program under the bill, as well as how that cost would be spread among households with different levels of income.

CBO estimates that the net annual economy-wide cost of the cap-and-trade program in 2020 would be $22 billion -- or about $175 per household. The figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but CBO said it does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change.

CBO said households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245. Overall net costs would average 0.2% of households' after-tax income.

According to the think tank group Center for American Progress, many conservatives (not normally known for concern about low-income people, they said) are opposing the bill reasoning how the bill will affect the poor.

"The bottom line is that CBO predicts the net costs of the global warming reduction program in H.R. 2454 will be relatively modest. The lowest-income households would actually gain under the bill. The second-lowest income households would face average daily costs of only 11 cents. And energy efficiency measures alone would save the average household nearly as much money as the pollution reduction programs would cost under this bill."

The group accused the bill's opponents of engaging in statistical demagoguery by citing horrendous dollar figures in an attempt to scare enough representatives to defeat the bill's passage.