CBO Says Climate Bill Will Cut Deficit, Emissions Set To Rise
There's a lot of jostling right now in the Senate for lead position on energy reform. Just which Senator will catch the eye of President Obama and Senate Majority Leader Reid and get their bill picked is anyone's guess. Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) received welcome news today when the Congressional Budget Office scored their bill and said that it would cut the deficit by $19 billion over the next decade.
CBO said that the "American Power Act" would boost federal revenues by about $751 billion over the next decade, while increasing spending by about $732 billion over that same period.
A no doubt happy Kerry and Lieberman issued a joint statement after the scoring was released, saying:
"Today, the Congressional Budget Office has sent Congress a powerful message: our comprehensive energy and climate bill will slash America's deficit by over $19 billion. There is no more room for excuses -- this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon. Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it."
Unlike other recent proposals which just look at the utility sector, the American Power Act would cover the entire economy. It aims to reduce emissions by about 17 percent below 2005 levels by 2020 and by 80 percent by 2050. This is below what the IPCC recommends for advanced economies like ours, but many greens see it as a start--the first bill ever signed by a president that outs a price on carbon.
The revenues would come from the bill's cap-and-trade provision, which auctions greenhouse gas emission allowances. CBO estimated that allowance prices would be about $14 in 2012 and $25 by 2020. In its estimate of the the House-passed climate bill, known as Waxman-Markey, CBO said prices would be $16 and $28 in 2012 and 2020, respectively.
Meanwhile, while the Senate dithers, the Energy Information Administration said today that U.S. carbon dioxide emissions will grow by 3.2 percent this year.