by Laura Shin -
Aug 6th, 2009
On Tuesday, a non-partisan government agency released an analysis of the climate change bill being considered by Congress, examining what impact the pending legislation would have on energy markets and the economy.
The Energy Department’s Energy Information Administration (EIA) projected that the American Clean Energy and Security Act would, by 2020, result in an $134 a year increase in an average household’s energy bill. Immediately, both proponents and opponents of the bill began touting the estimate – which projected a modest increase in energy prices through the year 2030 – as bolstering their side’s argument.
ACES proponents said the increase, roughly 23 cents a day, was nominal, while opponents called it an energy tax.
But in the back and forth, an important point was obscured: the report showed wide-ranging uncertainty over how effective the bill will be in meeting one of its primary goals -- reducing the emission of greenhouse gases from capped sources of pollution in the United States.
That's because a safety valve built into the bill – carbon offsets – makes it possible for polluters to pay someone else to reduce emissions instead.
ACES proposes to cut emissions of the greenhouse gases responsible for global warming several ways, including a cap-and-trade program, an improvement in technologies like carbon capture and storage and nuclear energy, and the buying and selling of carbon offsets.
If ACES passes, the amount of carbon dioxide companies can emit will be capped. If they emit more than that limit, they can meet the target by paying for a reduction of greenhouse gases elsewhere, thus offsetting their excess emissions.
But the rules are so complicated that the outcome is actually a big guessing game, even for the EIA.
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