EPA, Other Analyses Show Economic Impacts of Kerry-Lieberman Climate Bill

In preparation for the Senate debate over energy and climate legislation, Senators John Kerry (D-MA) and Joe Lieberman (I-CT) had requested the Environmental Protection Agency (EPA) to provide an economic analysis of their draft bill, the American Power Act (APA) . On June 15, the EPA released its analysis of APA , which would cap the greenhouse gases which cause climate change . According to the EPA, the probability of temperature changes remaining below 2°C by 2100, relative to pre-industrial levels, is roughly one percent without legislation.

But if the U.S. enacts legislation today, the likelihood of keeping global temperature rise below 2°C increases 10 times, even with a delay in action from developing countries. The EPA found that with the APA, U.S. gross domestic product would grow about 2.75 percent annually through 2050. Average household energy bills (excluding motor gasoline) would decrease up to 10 percent through 2030, while overall annual household costs would be $79 to $146 higher through 2050. These cost estimates do not account for the benefits of avoiding the effects of climate change.

“This definitive analysis proves that the American Power Act will decrease energy bills for families and protect consumers while offering the most effective cost containment measures of any previous climate legislation,” the Senators said in a joint statement . “The results of inaction speak for themselves as we send $100 million a day to Iran and our waters and coastlines are ravaged by the spill in the Gulf.”

Also on June 15, the ClimateWorks Foundation and the American Council for an Energy-Efficient Economy (ACEEE) released reports about the economic impacts of the APA, finding household savings and job creation to be benefits. The ClimateWorks report showed that with this legislation, the United States could maintain an average annual growth rate of 2.3 percent in gross domestic product through 2030, employment levels would be an average of 540,000 higher between 2012 and 2030, and households would save an average of $35 per year on utility bills through 2020 due to efficiency measures. Building retrofits, lighting and appliances, and financial incentives for the industry sector have the largest potential for cost-effective efficiency savings, according to ClimateWorks.

ACEEE found that implementation of APA along with the American Clean Energy Leadership Act (ACELA) , which was passed by the Senate energy committee last summer, would result in five percent energy savings, a loss of 60,000 jobs in 2020 before a net gain of 166,000 jobs by 2030 and 504,000 by 2050, and annual savings of $256 per household in energy bills by 2030. ACEEE found that further enhancement of energy efficiency measures in APA and ACELA could improve energy savings to 16 percent, nearly triple the number of jobs created because of the legislation to 364,000, and increase consumer energy savings to $448 per household per year through 2030. John Laitner, ACEEE Director of Economic and Social Policy, said , “The overwhelming evidence suggests that the more energy efficiency investments deployed, the more money consumers save and the more jobs we create.”