McCain/Lieberman Global Warming Legislation Hits Senate Next Week
Independent Analysis Predicts Consumer Savings, Lower Natural Gas Prices
WASHINGTON (July 15, 2003) -- A new economic analysis of global warming legislation by Senators John McCain (R-AZ) and Joe Lieberman (D-CT) predicts that major cuts in global warming pollution can be achieved at significant cost savings to American consumers. The bipartisan Climate Stewardship Act (S.139) is a comprehensive market-based solution to cut heat-trapping emissions from U.S. sources. It is due to reach the Senate floor next week as an amendment to the energy bill.
The study by the Boston-based Tellus Institute uses an enhanced version of the same research model used by Department of Energy. Findings include:
- Net savings to consumers accrue from 2013, reaching $48 billion annually in 2020.
- Household electricity bills decrease because of reduced energy demand, even though electricity prices rise slightly.
- Reduced demand for natural gas, and no natural gas price spikes.
- A scenario analyzing a more aggressive policy to improve vehicle fuel efficiency showed even lower costs and higher net economic benefits.
The McCain/Lieberman legislation sets a nationwide pollution limit for major sources in the industrial, commercial, electricity and transportation fuel sectors, which together produce nearly 80 percent of U.S. global warming emissions. The bill encourages innovation and saves money by allowing companies to cut their own pollution, or purchase emission allowances from those with lower reduction costs. Starting in 2010, emissions would be capped at 2000 levels; in 2016, the cap would be reduced to 1990 levels.
The modeling encompasses a set of complementary policies for cost-effective implementation. Energy efficiency investments funded by sales of pollution allowances, oil savings of 1 million barrels per day by 2013, renewable energy standards, promotion of combined heat and power systems, caps on other power plant pollutants, and smart growth measures. These policies are relatively modest in comparison to bipartisan proposals already offered in congress, and backed by NRDC and others.
The analysis is available at the Tellus Institute website.
Results of the new Tellus study are consistent with a recent study by the Massachusetts Institute of Technology (MIT). Both analyses predict sharply lower costs than forecast by the Energy Information Administration, which does not adequately predict energy savings.
The Natural Resources Defense Council is a national, non-profit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has more than 550,000 members nationwide, served from offices in New York, Washington, Los Angeles and San Francisco.