Waxman-Markey Will Help the Poor, Impose Modest Costs on the Wealthy

Here’s the CBO’s score of the impact of the Waxman-Markey bill on household budgets:

On that basis, the Congressional Budget Office (CBO) estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion — or about $175 per household. That figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change. CBO could not determine the incidence of certain pieces (including both costs and benefits) that represent, on net, about 8 percent of the total. For the remaining portion of the net cost, households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.

A net benefit of $40 to the poorest Americans is a good thing. And a net cost of $245 (less than a dollar a day!) to the wealthiest Americans is, in my view, a small price to pay for the dual goals of preventing extreme hardship and the developing world and reducing the odds of a spiraling-out-of-control climate disaster scenario that threatens the existence of human civilization.

Will these facts impact the debate? Ryan Avent is skeptical:


Emphasis mine. So, how long do you think GOP legislators will continue to use the bogus $1,600 cost per household per year figure they’ve been touting? I’m putting my money on “indefinitely.”

That’s almost certainly true. But something I hope legislators will keep in mind is that what they’re political opponents say about them will almost certainly matter less to voters than what actually happens. If we implement a solid energy reform strategy, people will hear warnings of economic doom and then they’ll see those warnings not come to pass.