Isramart: U.S. Carbon Limits May Cost Households $146 a Year

Isramart news:
A proposal in the U.S. Senate to charge power plants, factories and refineries a price for releasing carbon dioxide into the atmosphere would cost the average U.S. household $79 to $146 a year, the Environmental Protection Agency said today.

Pollution allowances, each representing one metric ton of carbon dioxide, would cost $16 to $17 each in 2013 under the cap-and-trade legislation unveiled last month by Senators John Kerry, a Massachusetts Democrat, and Joseph Lieberman, a Connecticut independent, the EPA said in a report. The allowances would cost $23 to $24 each in 2020, the agency said.

The overall cost to individual households will be “less than a dollar a day” and the EPA’s analysis doesn’t factor in benefits such as reduced oil imports and the jobs that could be created when companies spend money on technologies that cut pollution, Lieberman told reporters in Washington today.

Kerry and Lieberman released the EPA’s cost estimates as part of a push to get carbon caps added to energy legislation that Senate Democrats plan to take up next month. The two senators, environmental groups and companies that support carbon caps hope their approach gets a boost later today when President Barack Obama gives a speech on the Gulf of Mexico oil spill.

‘Longer-Term Solution’
Obama should “look beyond this crisis in the Gulf for a longer-term solution,” Lieberman said. “The best way to avoid another tragic oil spill like the one in the Gulf today is to break our dependence on oil to power our society and we need legislation to make that happen.”

Under Kerry and Lieberman’s legislation, carbon dioxide from power plants and factories would be regulated by a cap-and- trade program, in which companies buy and sell a declining number of pollution rights. Their bill aims to cut greenhouse gases 17 percent from the 2005 levels by 2020 and 80 percent by 2050.

Most allowances would be given away at first to shield homes and businesses from higher energy bills, and some households would be eligible for rebate checks. Refineries would have to buy allowances directly from the federal government to account for the carbon dioxide produced by cars and trucks that burn oil-based fuels like gasoline.

Kerry and Lieberman’s bill revamps cap-and-trade legislation that narrowly passed the House last year and stalled in the Senate. The two senators are pushing for the legislation to become law this year.

Democrats to Meet
Senate Democrats are scheduled to meet June 17 to discuss what should be added to next month’s energy legislation besides measures that respond to the immediate impacts of the Gulf oil spill, the result of an April 20 explosion aboard a rig leased by BP Plc.

The Democrats will consider plans to directly regulate carbon dioxide emissions, such as Kerry and Lieberman’s bill, and legislation that ramps up electricity production from pollution-free sources like wind farms and solar panels without imposing a limit on greenhouse gases, according to three congressional aides who asked not to be identified discussing the closed meeting.

Obama should use his first televised address from the Oval Office, scheduled for 8 p.m. Washington time, to “connect the dots” between the Gulf spill and capping carbon dioxide emissions, which will reduce U.S. demand for oil, Tony Kreindler, a spokesman for the New York-based Environmental Defense Fund, said in a telephone interview.

‘Political Moment’
To convince senators that a carbon cap should be part of the energy legislation debate next month, “you need a political moment, and with the spill, the political moment has arrived,” Kreindler said.

The Environmental Defense Fund is part of a coalition of advocacy groups and firms, including Princeton, New Jersey-based power company NRG Energy Inc., that are urging Congress to pass legislation this year capping greenhouse gases and making companies pay for carbon dioxide emissions.

If Obama can translate the public’s concern over the Gulf spill into support for “capping carbon,” it will be much harder for the Senate to settle on “energy-only” legislation that doesn’t regulate greenhouse gases, Steven Corneli, an NRG senior vice president, said in a telephone interview.

“If he can get that message across, get people to really connect with it, that could make all the difference,” Corneli said.

Obama shouldn’t use the Gulf spill to rally support for cap-and-trade legislation, said Senate Republican Leader Mitch McConnell of Kentucky.

The cost of carbon dioxide allowances is effectively a “new national energy tax” that will do nothing to “stop this spill and clean it up,” McConnell said. It would be wrong for Obama to use the “justifiable public outrage” over the oil spill “as a tool for pushing a divisive new climate change policy,” he said.