More on the Waxman-Markey CBO Score

I noted earlier the CBO’s analysis indicating that the poorest 20 percent of Americans will actually gain money as a result of Waxman-Markey’s cap-and-trade provisions, while even the wealthiest Americans will pay less than a dollar a day. Kevin Drum helpfully found the table that lays out the precise figures:

Meanwhile, my colleague Dan Weiss notes that even this is almost certainly too pessimistic:

Signficantly, CBO’s estimate also does not include the economic benefits of other provisions in H.R. 2454. The American Council for an Energy Efficient Economy estimates that the efficiency provisions alone could save businesses and consumers $22 billion annually by 2020. The savings would be $170 per household in 2020 –- roughly equal to CBO’s cost per household estimate for ACES in 2020.

To be sure, in part the low cost of compliance reflects the fact that Waxman-Market’s emissions targets aren’t especially aggressive. Still, there’s a heck of a lot more aggressive than doing nothing. And the CBO’s accounting of this explicitly doesn’t include the benefits of averting catastrophic climate change — a fairly important piece of the puzzle. Historically, meanwhile, compliance with new environmental regulations has typically proven easier than people believed ex ante. You can’t do an analysis which just assumes that as-yet-uninvented technologies will come into being, but typically a new regulatory regime does, in fact, spur the creation of as-yes-uninvented technologies or practices that help with compliance.