Okay, I'm back from my weeklong jaunt checking out the French nuclear industry (more on that later), and yep, sure enough, thanks to unlucky scheduling, the trip came smack during the most hectic week in Congress for energy and environmental news—four long days of hearings on the Waxman-Markey climate-change bill. Actually, it sounds like much of last week turned out to be a total circus, and I can't say I'm crushed to have missed, say, Joe Barton trying to "stump" Energy Secretary Steven Chu over where the oil in Alaska comes from. But there does appear to have been some serious news, so let's do a quick rehash of the important bits.
First, more evidence that a stringent cap-and-trade regime won't cripple the economy. The EPA put out an economic analysis of Waxman-Markey's cap, which would curb greenhouse-gas emissions 20 percent by 2020 and 83 percent by 2050. The agency figured that the bill would cost U.S. households anywhere from $98 to $140 per year between now and 2050 on average—less than 50 cents a day. If the bill did pass, the economy would grow to $22.6 trillion in April rather than January of 2030. So much for Armageddon. As the price for helping humanity preserve a livable climate, it sounds like a steal.
Of course, as Keith Johnson sagely notes, watch the assumptions in studies like these. The EPA figures that 40 percent of the revenue Congress raises by selling carbon permits will be refunded back to Americans. But who knows what the final figure will be: Many of the permits may be doled out to companies for free, and some of the auction revenue may get spent on other things. Meanwhile, the contours of our energy landscape in 2050 could depend on the future of nuclear power and coal carbon capture, two big unknowns that are hard to model. Still, the broad takeaway is that aggressive carbon regulation won't be catastrophic. And the EPA analysis doesn't account for savings from energy-efficiency measures in the bill—which could reduce the cost further.
Then again, it's one thing to talk about overall economic impacts and another to talk about regional effects. Not all states will fare equally well, and Congress is composed of state representatives, not at-large parliamentarians. That's why, as Darren Samuelsohn reports, Dems from oil and coal states like Virginia and Louisiana are quietly pushing Waxman to relax the emissions and renewable-energy targets before the legislation emerges out of subcommittee. (Committee leaders are trying to bang out final language for the bill before markup begins later this week.)
Likewise, Kate Sheppard wrote a great dispatch last week about utilities, manufacturers, and other companies pleading for leniency under the cap-and-trade provisions of Waxman-Markey. I've previewed this before—Congress will have to decide how many free emissions permits to give to energy-hogging industries like aluminum and cement, which could see their costs rise from 2 percent to 11 percent by 2030, according to a new National Energy Commission report. Also, expect more provisions to guard against the risk of offshoring (it doesn't do Mother Earth much good if U.S. aluminum smelters are all gravitating to China to belch out all the carbon they please).
So the backroom-dealing begins in earnest this week. As an indication of just how gnarled a task this will be, Nancy Pelosi is now hinting that a comprehensive climate and energy bill might take longer than a year to pass, saying that she hopes Congress "will have made substantial progress" by the time the next Earth Day rolls around—April 22, 2010. Because these hearings are so much fun, it'd be a real shame if they came to a close anytime soon.
Update: Scratch that, just got word that the markup will happen next week, not this week.