GREENHOUSE GAS REDUCTIONS AREN'T CHEAP
October 29, 2004
U.S. Senators John McCain (R-Arizona) and Joseph Lieberman (D-Connecticut) in January 2004 introduced a modified version of the Climate Stewardship Act they had championed in 2003. A new study by Charles Rivers Associates documents the hefty national and state-by-state costs the modified McCain-Lieberman bill would impose.
McCain-Lieberman 2004 retains the mandate to reduce greenhouse gas emissions to 2000 levels by 2010, but it drops the subsequent requirement to reduce emissions to 1990 levels. Charles Rivers Associates, in cooperation with the National Black Chamber of Commerce's United for Jobs project, analyzed the projected costs of McCain-Lieberman 2004 in a study released in June.
According to the study, McCain-Lieberman 2004:
- Will cost the average U.S. household at least $600 per year by 2010, rising to at least $1,000 per year by 2020.
- Will cost the U.S. economy at least 39,000 jobs in 2010 and at least 190,000 jobs by 2020.
- Will force at least a 13 percent rise in electricity prices by 2010 and at least a 19 percent rise in electricity prices by 2020.
- Will force at least a 9 percent rise in gasoline prices by 2010 and at least a 14 percent rise in gasoline prices by 2020.
In an observation that will be important to both state and federal governments, the study notes the economic costs of McCain-Lieberman 2004 will reduce tax revenues. The federal government will lose at least $7.5 billion in annual tax revenue by 2010, with the states suffering similar proportional losses. The declining revenues will be compounded by greater spending pressures than baseline forecasts, as higher unemployment and falling purchasing power result in demands for greater social spending to care for the unemployed and compensate for falling living standards.
Source: James M. Taylor, "New Study Shows Hefty Price Tag for McCain-Lieberman Bill," Environment and Climate News, August 2004, Heartland Institute; and Anne E. Smith, Paul Bernstein and W. David Montgomery, "The Full Costs of S.139, With and Without its Phase II Requirements," Charles River Associates, April 2004.
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