By Chris Baltimore
WASHINGTON (Reuters) – A U.S. Senate proposal to cap and eventually reduce heat-trapping carbon dioxide emissions would stunt economic growth by no more than 1.6 percent by 2030, the U.S. Environmental Protection Agency found on Tuesday.
The EPA analysis counters claims from some who oppose mandatory caps on carbon dioxide emissions that the U.S. economy would take a sizable hit if the United States enacted legislation backed by Democratic leaders of both the Senate and House of Representatives.
Senators Joseph Lieberman, Connecticut Independent, and John McCain, Arizona Republican, asked the EPA in February to analyze their plan to cut U.S. carbon dioxide emissions by 65 percent below 1990 levels by 2050.
The EPA found that the Climate Stewardship and Innovation Act of 2007 would shave up to 1.6 percent, or $419 billion, off a baseline forecast for U.S. gross domestic product in 2030 and up to 3.2 percent, or $1.332 trillion, by 2050.
At a hearing before a subcommittee of the Senate Environment Committee on Tuesday, Lieberman noted that “nothing is free,” but called the impact “manageable and affordable.”
The full U.S. Senate could weigh climate change legislation for the first time this fall, Lieberman said.
The Senate Environment Committee must sort through at least five proposals to cut global warming.
Sen. Barbara Boxer of California, the panel’s chairman, said she wants members to review all the proposals when they return from their summer recess in September.
The United States is the biggest emitter of carbon dioxide, one of the greenhouse gases blamed for global warming, melting glaciers and rising sea levels.
Lieberman also said the EPA analysis found that his plan would hold U.S. carbon dioxide levels below 500 parts per million by the end of the century, a key level that international scientists say will allay the worst global warming impacts.
The EPA analysis also found that U.S. gasoline prices would rise by 26 cents a gallon in 2030 and 68 cents a gallon by 2050, and electricity and natural gas prices would rise slightly.
Cap-and-trade regimes envisioned in many legislative proposals in Congress would create a multibillion-dollar market for trading emissions credits.
If the McCain-Lieberman bill is enacted, the EPA found the market for credits and offsets would be $25 billion in 2030 and $57 billion in 2050.
To protect U.S. consumers from price fluctuations in these markets, four U.S. senators on Tuesday proposed legislation that would form a body reminiscent of the Federal Reserve Board of Governors to monitor carbon markets and intervene during severe price fluctuations.