Sometime in early June, the Lieberman-Warner climate bill—which would aim to cut U.S. carbon emissions 66 percent by 2050 via cap and trade—will finally hit the Senate floor. Whether it survives or not is anyone's guess, but here's Keith Johnson's write-up of a recent hearing on the bill's price tag:

One takeaway: Lieberman-Warner can cut a big chunk of U.S. greenhouse-gas emissions without killing the economy. Estimates vary between about 0.5% of GDP and about 2% of GDP by 2030.

The biggest question mark for most experts is how quickly industry can develop and deploy new clean-energy technology, like "clean coal." If clean coal doesn't materialize and the nuclear renaissance gets derailed, for example, the bill's cost to the U.S. economy will be twice as large over the next two decades, the EPA said.

Okay, that's encouraging. But is it possible that even these estimates are too pessimistic? Maybe. Back in 2002, economist Eban Goodstein studied a whole slew of old cost predictions that had been done for the various environmental bills of yore. As it turned out, curbing pollution at the source almost always turned out to be cheaper than the experts predicted—and much cheaper than industry lobbyists predicted. (On the other hand, cleaning up existing messes was often pricier than expected, as with, say, Superfund.) Meanwhile, most of these estimates assume that there's little cost to doing nothing about global warming, which, as this latest Tufts study reminds us, is a weak bet.

Meanwhile, as the CBO's Peter Orszag testified, there are a bunch of intricate-but-crucial design issues to consider, like whether the cap regime should have some sort of "safety valve" that allows the government to auction off additional pollution credits if the price of carbon rises above a certain level. If done right, this might give companies greater flexibility to meet the cap. If done poorly, well, it'd basically de-fang the whole regime. Barbara Boxer is the bill's floor manager, and she's offered up one such safety-valve proposal that Joe Romm dissects here.

Another issue to watch is the giveaway vs. auction debate, which Kevin Drum explained very clearly in this post, and Johnson also summarizes nicely:

The other issue is who bears the big burden. If the government sells the emissions permits, rather than giving them away, it can use the proceeds to stimulate the economy and lessen the bill's impact. Of course, poor families would get hit harder by rising electricity and gas bills. Or the government can use the proceeds to compensate low-income families, even at the cost of overall economic pain.

What about giving away the emissions permits, as many in industry want, even as they pledge not to pocket windfall profits? That wouldn't do anyone any good, Mr. Orszag said—except the utilities. The government would lose potential revenue, while costs would still rise for consumers: "Ultimately, consumers will, in one way or another, bear costs roughly equal to the value of the permits."

It all gets quite knotty and it's enough to make an onlooker wish that a plain old carbon tax was on the table instead. But no such luck. Anyway, Romm predicts that Lieberman-Warner is not long for this world: Even if pigs do sprout wings and the bill gets 60 votes, it will never slide past a White House veto. Maybe so, but surely it's a good thing that various senators are at least starting to think about how to design this contraption, so that when 2009 rolls around they don't have to start from scratch.

--Bradford Plumer