Detailed Climate Proposal Won't Harm U.S. Economy -- EIA

January 11, 2007
02:02 PM
EIA Analysis of Mandatory Climate Legislation Shows:
Detailed Plan Won’t Harm U.S. Economy
The Energy Information Administration (EIA) today released an analysis of a highly detailed discussion draft on global warming legislation. The findings: mandatory steps to reduce greenhouse gas emissions can be achieved at very low cost to American households and without harming the U.S. economy.
EIA, created by Congress in 1977, is a statistical agency of the U.S. Department of Energy. Its mission is to provide policy-neutral data, forecasts and analyses to promote sound policymaking, efficient markets and public understanding regarding energy and its interaction with the economy and the environment.
Bingaman initially proposed global warming legislation as an amendment to the Energy Policy Act of 2005.  That amendment was not offered, but a bipartisan “Sense of the Senate” resolution based on it was and passed in the Senate with 53 votes.  A year later, after dozens of meetings with Republican and Democratic Senate offices, stakeholder groups and others, and an all-day workshop on climate policy, a modified draft was given to EIA for analysis.  A bipartisan group of six Senators – Bingaman, Arlen Specter, Mary Landrieu, Lisa Murkowski, Ken Salazar and Dick Lugar – asked the agency to analyze the revised proposal.
Sen. Bingaman:  “I am committed to developing bipartisan climate change legislation that can pass the Congress this year. Getting good analysis of draft legislation is the critical first step to understanding the impacts of global warming policy.  I plan to hold a hearing to review the results of this analysis.”
Sen. Specter:  I thank EIA for this report and look forward to reviewing it thoroughly.  I am particularly interested in its analysis of domestic energy supplies, such as our abundant coal resources, which are crucial for national security and energy independence.  I look forward to working with my colleagues on the serious and important issue of global climate change.” 
Sen. Landrieu:  “Understanding the economics of climate change is a crucial part of developing responsible policies that protect both our economy and our environment. This analysis provides us with important information on the path forward.”
Sen. Murkowski “Climate change is a serious issue that we need to address.  As we consider placing mandates on greenhouse gas emissions we must understand the impacts that such action will have on our economy.  The analysis done by EIA will give Congress valuable information as we move forward in our deliberations.”
Sen. Salazar:  “As we consider the alternatives for tackling the problem of climate change, it is important that we understand the impacts of regulation on our economyThe effects of global warming are serious and we should continue to study and monitor the direct threat posed to our way of life.  As my colleagues and I continue to study the economic impacts of climate legislation, we look forward to working with all of our colleagues in the Senate to craft a solution to this important problem.”
Sen. Lugar:  "The threat of climate change has been made worse by inefficient and unclean use of energy.  In the long run this could bring drought, famine, disease and mass migration, all of which could lead to conflict and instability. This study is part of the analysis necessary for us to consider as we take action to reduce these threats.  I thank the EIA for its contribution."
According to EIA, the climate plan would have the following impacts:
Ø      A meaningful start towards reducing emissions.  Compared to projected emissions without the program, emissions are lowered by 5% (372 million tons) in 2015 and 11% (909 million tons) in 2025, and 14% (1259 million tons) by 2030.
Ø      Economic effects that are almost non-detectable.  Costs to the U.S. economy would total 0.1% of GDP through 2030. Cumulative GDP is projected to double from 2006 to 2030.  (See attached slide)
Ø      No substantial increase in electricity prices.  Electricity prices would rise by less than 11% by 2030.
Ø      A continued vital role for coal in our energy mix.  Coal use would grow by 23% by 2030 compared to 53% without the program.
Ø      No substantial shift to natural gas in generation.  Natural gas demand is projected to increase by a mere 1% by 2030.
Ø      A meaningful boost for renewable energy.  Non-hydro renewable electricity generation would rise by 53% by 2030.
The .pdf of the report has been posted on the EIA web at:
Detailed spreadsheets of the report results are posted along with the .pdf at:
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