The House GOP loves to repeat falsehoods about climate and clean energy action (see “MIT Professor tells GOP to stop ‘misrepresenting’ his work and inflating the cost to families of cap-and-trade by a factor of 10” and then again three weeks later, MIT Professor says GOP “misrepresentation” of his April 2007 study to project costs for Waxman-Markey is “inappropriate,” “silly” and “just wrong”).
If you are listening to the House floor debate over the “rule” that will set the terms of the debate for Waxman-Markey, then you’ve heard pretty much every Republican repeat the claim that the Congressional Budget Office found that W-M would add $.77 a gallon to the price of gasoline in the next decade.
That charge is false. It comes from the American Petroleum Institute, (see here) which decided to ignore the actual CBO analysis and offer its own instead, claiming it is what CBO found. The API is a strong opponent of the bill and has been pushing disinformation on global warming for more than a decade.
As a study by 5 national laboratories noted in1998, “$50 per tonne of carbon [$14 a tonne of carbon dioxide] corresponds to 12.5 cents per gallon of gasoline.”
To cause a $.77 increase in gasoline prices, the climate bill would have to result in greenhouse gas allowance prices of some $85 a ton of CO2. Now you can go to Table 3 of the CBO analysis yourself, and you’ll see that CBO estimates the allowance price will hit $26 a ton in 2019 — and that is in actual (not inflation-adjusted) dollars. In 2008 dollars, that would be closer to $21 to $22. So in fact the CBO estimates that gasoline prices in 2019 would be about 20 cents a gallon higher than today (in constant dollars). And that’s a lot lower than the price will rise if we don’t take strong action to jumpstart the transition to a cleaner, more efficient energy system.