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EPA Finds Senate Climate Bill Affordable

Date: 18-Jun-10
Country: USA
Author: Timothy Gardner and Richard Cowan

U.S. environmental regulators said on Tuesday the climate and energy bill in the Senate would only add slightly to average household costs, but the finding was not expected to boost chances for the legislation that would cap greenhouse gas emissions.

The climate bill unveiled last month by Senators John Kerry, a Democrat, and Joseph Lieberman, an independent, would cost households an average of $79 to $146 per year through 2050, the Environmental Protection Agency said in an economic analysis.

Through 2020 consumer energy costs would go down before picking up in following decades, the EPA said in the analysis that Senate Majority Leader Harry Reid promised Republicans last year the bill would have to face.

The EPA's cost estimate of the Kerry-Lieberman bill was similar to the price tag it put last year on an analysis of the climate bill narrowly passed by the House of Representatives, which gained no traction in the Senate.

One analyst said the lack of a big change from last year's estimate limited how much the new analysis will boost support for the long-delayed Senate bill.

"The bottom line is the EPA analysis was not much different than last year's and the moderate result won't do much to change the calculus in the Senate," said Divya Reddy, an analyst at the Eurasia Group in Washington. "Many lawmakers from coal and manufacturing states still have reservations."

That could leave the bill's chances of passing largely up to President Barack Obama, who has made passing a broad energy bill to boost alternative energy and cut emissions one of his top priorities. In a speech to the nation later on Tuesday, Obama is expected to offer ambitious plans to cut U.S. dependence on fossil fuels in the wake of the BP Plc oil spill in the Gulf of Mexico.

The EPA analysis also showed that prices for carbon permits in the cap and trade market outlined in Kerry-Lieberman should hit $16 to $17 per tonne in 2013 and $23 to $24 per tonne in 2020. Those prices were well within range of the bill's initial floor and ceiling prices.

DID NOT FACTOR IN BENEFITS

For his part, Kerry centered on the part of the analysis that showed costs would fall at first.

"Well-designed climate change and energy legislation is good for American consumers," Kerry told reporters.

He also added the EPA analysis does not factor in other benefits to the U.S. economy that would be achieved from getting global warming under control. Those include, he said, avoiding lower crop yields, extreme weather-related deaths and more destructive storms.

Environmentalists were pleased with the analysis.

"The EPA's analysis removes the last excuse senators may have for not passing strong climate and energy legislation this session," Kevin Knobloch, the president of the Union of Concerned Scientists, said in a release.

But big industry has been skeptical of EPA analyses on previous climate bills. The American Petroleum Institute has said it would not make a decision on whether to support the bill until the Energy Information Administration does its own analysis. Some see the independent branch of the Department of Energy as freer of influence from the Obama administration.

Majority Leader Reid wants a broad energy bill to move to the Senate floor in coming weeks, though time is running short ahead of midterm elections in the fall and ideas for legislation are still being kicked around.

(Editing by David Gregorio and Sofina Mirza-Reid)

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