A Cap and Trade System Could Save US Families $900 a Year


Photo via Inhabitat

It's something of a shocker, but according to a new analysis, using a cap and trade system to fight climate change wouldn't end up saddling American families with heavy costs. It would actually start saving them hundreds of dollars—as soon as 2013. This is bad news for carbon cap opponents, whose main line of attack is that such a system would place a massive financial burden on Americans. Instead, US families could be saving up to $900 a year in the near future. But how can that be? Won't a carbon cap cause companies to pay for their pollution? So wouldn't, say, coal companies—among the heaviest polluters of all, and the ones that provide the US with most of its electricity—have to raise the amount they charge the average family? And won't raised utilities make the average family pay more every year?

Not necessarily.

The Union of Concerned Scientists used the US Department of Energy Modeling System to analyze the long term effects of a comprehensive cap and trade system, like the one included in the Democrat's climate bill that's causing such a ruckus in Congress right now. The UCS found that under such a bill, we could lower carbon emissions 56% by 2030, and thanks to energy efficiency measures included in the bill, American families would save $300 a year by 2020, and $900 by 2030.

We can save consumers money on their energy bills because of increased energy efficiency, even though electricity rates and gasoline prices go up slightly. That means families will see average household savings of $900 a year in 2030, while businesses will, all together, save nearly $130 billion a year. Households and businesses in every region in the nation - even coal-dependent regions - will see lower energy bills.

Again, how can that be?
The transportation policies get us cleaner cars, cleaner fuels and better transportation options. The energy policies get us more efficient appliances and buildings, renewable energy and more efficient natural gas generation. A transparent and smartly-designed cap and trade policy assures the emissions reductions the U.S. needs to help avoid the worst effects of global warming.

So basically, it's not strictly the cap and trade mechanism that would generate the savings for Americans—it's the comprehensive package of increased energy efficiency more than offsetting the moderate up-front costs and clean energy getting cheaper. Costs go up a bit, yes—but more efficient energy sources, homes, and appliances start saving Americans much more than that.

Of course, it's not all rosy. The UCS writes:

We did not find that all of these benefits will come for free. Energy costs may be slightly higher in the very early years as we make investments in the clean energy economy, but those investments will reap much higher savings for Americans in every region later on.

But that's such a minor setback in the grand scheme, especially considering that those Americans "will actually start paying less on their energy bills by 2013, because reductions in usage from energy efficiency more than offset the modest increase in energy prices." Especially considering that Obama wants to use the climate revenue from the cap and trade to give middle and low income families tax breaks.

So if the main argument against cap and trade is toppled, what stands in the way of the US finally acquiring a system to curb carbon?

Something tells me its opponents will find something . . .

Follow me on Twitter at bcmerchant
More on Cap and Trade:
Carbon Cap And Trade - A Looming Battle Among States
Hey Obama - Check Out the Carbon Cap and Trade Already Up and Running in Your Own Backyard
Australia's Carbon Cap System Will Cost Coal Companies $3.5 Billion

Tags: Congress | Economics | Electricity | Energy Efficiency

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