EIA Analysis: Climate Bill Will Cut America’s Oil Addiction for About a Dime a Day

A just-released analysis from the Energy Information Administration (EIA) says the cap on carbon pollution in the American Clean Energy and Security Act of 2009 (H.R. 2454) can be achieved for $83 per year per household – or a dime a day per person.

One of the reasons it’s so affordable is that increases in consumers’ electricity and natural gas bills are substantially mitigated through 2025 by the allocation of free allowances to regulated electricity and natural gas distribution companies.

Nat Keohane, EDF’s director of economic policy and analysis, says this:

This analysis confirms what every other credible study has found, and it – once again – refutes the widely reported scare tactics about the cost of the cap and trade bill. Opponents of action will always try to cherry-pick the numbers and use models with biased assumptions. The EPA, EIA and CBO are the non-biased standard for economic analysis.

For a dime a day we can solve climate change, invest in a clean energy future, and save billions in imported oil.

The analysis also shows that the climate bill passed by the House would reduce our dependence on foreign oil – the U.S. would reduce its consumption of oil by 344 million barrels in the year 2030 alone, under the provisions of the bill. That’s a cut of more than 12 percent of predicted imports for the same year without the bill.

Other key points about the EIA analysis:

  • It considers only the costs of reducing global warming pollution, and does not take into account the many potential benefits.
  • It has similar findings to two other impartial and substantive studies done recently, from the Environmental Protection Agency and the Congressional Budget Office.
  • A leaked draft of the EIA report, which was covered in some early media stories, contained an error. The average yearly change in consumption per household for the years 2012-2030 is $83 — NOT $142. The correct figure is in the final version.
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  1. Shelly
    Posted August 5, 2009 at 1:06 pm | Permalink

    where did you get the $83 figure for the yearly change in consumption? I can’t find that in the report. I’m seeing $134..?

  2. Posted August 5, 2009 at 2:18 pm | Permalink

    Thanks for your question. The answer, from our economic analysis team, is that $83 is the net present value (discounted to today’s money — the right way to think about this) for the yearly change in consumption. See figure 34, page 43 of the report.

  3. Charles Wilson
    Posted August 7, 2009 at 4:32 pm | Permalink

    I read it.
    … that price assumes we replace near half of Coal with a 17:15 ratio of CHEAP NUCLEAR to CHEAP RENEWABLES — 3 lies in 4 words.

    If not, they plan on increasing Natural Gas at only a slight Price rise. = near $2000/family in 2030.

    Of course if there is more demand, the Price SKYROCKETS !

    Real effects: by 2020, little change except ONLY existing companies get “free” ANYTHING. With Science getting only $1 Billion of the $106 B. per year to restore the JFK level — FORGET New ANYTHING, forget Cheap, forget Competitiveness.

    = 3 % of Global Carbon cut — and that is IGNORING USA Industry that flees to China where they use ONLY DIRTY COAL WITH _NO_ SCRUBBERS.

    As the Copenhagen Consensus said: RESEARCH FIRST.

    Google priced an 18% U.S. cut at $440 Billion per year.

    $410 Billion a year, once the cuts become REAL, is the REAL Price

    2050: an 83% cut is FIVE 17% cuts — each MORE expensive than the last. Roughly HALF of all income in 2050.

    If we are to spend 10s of Trillions: first Research/competitiveness is the only way to
    > pay it off
    > reduce it’s cost
    > after 10 years, plentiful Asteroid PLATINUM will save 20% plus of near any engine, plus the Competitiveness from so much Research.

    & At that price, GIANT programs, like the 1970’s Constellation of Space Factory cities built of Moon Material that made electricity at HALF the price of Coal — make sense. They STILL cost $3 Trillion before we get anything but for another 5 Trillion, you replace ALL the electrical power of the planet = an over 60% Global cut.

    By 2050, Caps will spend (or lose in reduced GDP) that much EVERY YEAR.

    And for maybe a 5% cut in a mostly-Chinese Global Carbon Cloud ? Ugh !

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