May 9

Co-authors of the leading climate change bill are still convinced their cap-and-trade legislation is the appropriate economic and environmental prescription for the country -- even though it would likely raise out-of-pocket prices for household energy.

Sens. Joe Lieberman, I-Conn., and John Warner, R-Va., remain resolute after the independent forecasting arm of the Energy Department predicted economic robustness under their Climate Security Act would be virtually identical to growth in the absence of the law.

Americans´ average annual energy bills -- excluding transportation costs -- would be $30 to $325 higher by 2020 and $76 to $723 higher in 2030, according to a report released by the Energy Information Administration in late April.

"Two separate government analyses have now come to the same conclusion," Lieberman said, also referring to an Environmental Protection Agency study circulated in March that predicted the bill would cut GDP growth 1 percent to 3.8 percent by 2030. "Our bill curbs global warming without harming the U.S. economy."

Warner was equally optimistic.

"I am pleased that the EIA has confirmed what Senator Lieberman and I firmly believe: Americans can make significant reductions in our greenhouse gas emissions in a manner that does not harm the economy," Warner said. "(The) release of this latest analysis will only serve to validate our interest in moving a bill through the U.S. Senate as soon as possible."

Majority Leader Harry Reid, D-Nev., has vowed the bill will see daylight on the Senate floor beginning June 2. In a nutshell, the 38-year measure is modeled after a market system that controls pollutants causing acid rain. The cap provides allowances for industries to sell or buy to meet emissions requirements of carbon dioxide and other heat-trapping gases. Caps would begin at 2005 emissions levels in 2012, with a target of 70 percent reductions by 2050.

Higher energy prices are on the horizon because reductions in planet-warming gases would force fuel suppliers of petroleum, natural gas and coal to pass on added compliance costs to consumers.

EIA´s analysis plays out after 2030, 20 years before Lieberman-Warner is scheduled to sunset.

"The emissions targets for the 2030 to 2050 period are likely to be very challenging because opportunities for further reductions in the power sector are limited," the authors wrote in their 74-page report.

Gross domestic product would continue to flourish for the next two decades with or without a cap-and-trade law, EIA concluded. Statisticians figured that Lieberman-Warner-like legislation would reduce the GDP would drop as little as 0.3 percent or as much as 0.8 percent.

EIA included a range of price possibilities because specialists employed half a dozen modeling scenarios. Analysts considered the availability of critical no- and low-carbon technologies including carbon-capture-and storage capabilities at or near coal-fired power plants, nuclear power and renewables such as solar and wind.

Reliance on natural gas would drop under Lieberman-Warner unless the low carbon technologies mentioned above aren´t plentiful by 2020. Otherwise, industries needing to reduce their carbon footprint will flock to natural gas as a low-cost alternative, thus causing price increases.

Coal consumption also would fall off by 2030, EIA predicts, because operations at some existing plants would be mothballed or pared back to reduce emissions.

"While forecasting policy change is beyond EIA´s mandate, an argument can be made that, all else being equal, public and industry awareness of climate change as a major policy issue can potentially impact energy investment decisions even if no specific policy change actually occurs," EIA researchers noted.

In an early April conversation about chances of his bipartisan bill passing the Senate, Lieberman said his arithmetic revealed 45 senators voting yes, 15 tilting heavily in favor and 20 staying open-minded while waiting for their special-interest pots to be sweetened. He categorized the remaining 20 as "hopeless."

That latter category included Oklahoma Sen. Jim Inhofe, who has threatened a filibuster. Inhofe, who voted against the bill when it emerged from the Senate Environment and Public Works Committee last December, called the measure "wrong for America."

"Despite this gloomy EIA analysis, proponents of Lieberman-Warner are still claiming the bill will not impose economic harm," said the environment committee´s ranking Republican. "The question now is which U.S, senator will dare to stand on the Senate floor a month from now to vote in favor of significantly increasing the price of gas at the pump?"

E-mail Waste News correspondent Elizabeth McGowan at elizabethherron@hotmail.com

To subscribe or visit go to:  http://www.wastenews.com