The House of Representatives is scheduled to open debate on the American Clean Energy and Security Act tomorrow. While detractors want to make cost appear to be a major sticking point, the Congressional Budget Office (CBO) and the Environmental Protection Agency (EPA) both released reports saying the cost to American households will be small.
Back in April, opponents of the proposal falsely claimed that a cap-and-trade plan would cost every family more than $3,100.00 per year. This specific claim, a misrepresentation of a report by MIT economist John Reilly, eventually receded, but the attempts to paint this as too expensive have not.
Congressman Henry Brown, Jr. (R-SC) alludes to the myth of high costs in an article in the Georgetown Times. He expresses his opposition to this plan despite admitted support among his constituency:
For several weeks now, both my Washington and South Carolina offices have been receiving numerous calls voicing your support for President Obama’s “Clean Energy Act.” … In fact, most experts suggest that an increase of at least $3,100 dollars will be added to each of your family’s already outrageous annual energy costs if this bill is passed….
Those experts must not have included the CBO. They calculate that this down-payment on the President’s vision of a clean energy economy will cost households roughly $175 per year, and the EPA has said that the cost would range from $80 to $111. Of course, these estimates don’t take into account the avoided costs of climate change impacts, but they show that we can start to set limits on pollution and create a 21st Century energy system for about the price of postage stamp each day.
The plan provides both direct and indirect assistance for families, particularly low-income households. For example, a low-income energy tax credit provides between $161-359 to families depending on the size in 2012, with the amounting expected to increase 75% by 2019. Ultimately, the cost will range from a net cost of $245 per year for households with the highest incomes to a net benefit of $40 per year for households with the lowest incomes. That’s right – some households may net a small savings from these policies: an inconvenient truth for opponents, indeed.
Additional investments in energy efficiency and renewable energy will also benefit consumers and create new jobs. For example, energy efficiency investments will create 250,000 jobs by 2020 and 650,000 by 2030, according to the American Council for an Energy Efficient Economy.
Workers who are laid off from companies who had to pay more to reducing pollution will receive up to 156 weeks of benefits, including cash benefits equal to 70 percent of their average weekly wage, expenses for job training and employment search, and an 80 percent subsidy for continuing health care coverage. That doesn’t make up for a lost job, but it will help cushion the blow and transition skilled workers into new jobs in the clean energy field.
In a press conference on Tuesday, President Obama said:
The nation that leads in the creation of a clean energy economy will be the nation that leads the 21st century’s global economy. That’s what this legislation seeks to achieve — it’s a bill that will open the door to a better future for this nation. And that’s why I urge members of Congress to come together and pass it.
The American Clean Energy and Security Act could be strengthened to supply even more benefits to families and businesses, but it isn’t going to cost near as much as opponents say it will. In fact, the Congressional Budget Office reports that the bill will reduce U.S. budget deficits by $24 billion between 2010-2019. Perhaps the only cost we’ll incur is the price of a long distance phone call to China to let them know that we don’t intend to be indebted to them forever.