Two Recent Studies of Regional Differences in the Effects of Policies That Would Price Carbon Dioxide Emissions

This Congressional Budget Office document dated July 9, 2009 reports that two teams of experts—one affiliated with the National Bureau of Economic Research (NBER) and one affiliated with Resources for the Future (RFF)—have estimated regional differences in the effects of policies that would increase the prices of fossil fuels in rough proportion to the carbon dioxide (CO2) emitted when they are combusted, as would occur under a cap-and-trade program.

NBER’s analysis finds relatively small differences in the effect on households across
regions of the country (see Figure 1). In the analysis, increased expenditures account for the largest share of average household income (1.9 percent) in the East South Central region and the smallest share (1.5 percent) in the West North Central region. Most of the regional differences stem from differences in the amount of energy that households consume directly (such as gasoline, electricity, natural gas, and home heating oil) rather than indirectly (such as fossil fuels used in the production of food, clothing, and other items).

An analysis by RFF examines the effects of an emission price of $20.91 per metric
ton of CO2 using households’ expenditure patterns and income levels in 2006.2 The
analysis accounts for both regional variation in the consumption of goods and services and regional differences in the amount by which electricity prices would increase as a consequence of the policy. Using a model that incorporates changes in the supply of and demand for electricity, RFF estimates that the price of electricity would increase by as little as 7 percent in California and by as much as 27 percent in the Ohio Valley.

Alliance; Wester Resource Advocates, Western Watersheds Project, County of San Miguel, Colorado v. Dept of Interior

This compaint seeks to block the placement of electrical transmission lines over federal lands.

Climate Trade Change measures: Estimating Industry Effects

This Testimony by the Government Accountability Office (GAO-09-875T) finds that estimating the potential effects of domestic emissions pricing for industries in the United States is complex. If the United States were to regulate greenhouse gas emissions, production costs could rise for certain industries and could cause output, profits, or employment to fall. Within these industries, some of these adverse effects could arise through an increase in imports, a decrease in exports, or both. However, the magnitude of these potential effects is likely to depend on the greenhouse gas intensity of industry output and on the domestic emissions price, which is not yet known, among other factors.

Estimates of adverse competitiveness effects are generally larger for industries that are both relatively energy- and trade-intensive. In 2007, these industries accounted for about 4.5 percent of domestic output. Estimates of the effects vary because of key assumptions required by economic models. For example, models generally assume a price for U.S. carbon emissions, but do not assume a similar price by other nations. In addition, the models generally do not incorporate all policy provisions, such as legislative proposals related to trade measures and rebates that are based on levels of production.

Climate Change Trade Measures: Considerations for U.S. Policy Makers

This report to Congress by the Government Accountability Office examines how greenhouse gas emissions pricing could potentially affect the international
competitiveness of U.S. industries, and to examine trade measures being considered as part of proposed U.S. climate change legislation. The report shows that estimating these effects is very problematic and depends upon many variable both internal and external.

Bottled Water: FDA Safety and Consumer Protections Are Often Less Stringent Than Comparable EPA Protections for Tap Water

This Report (GAO-09-861T) of testimony from the Government Accountability Office argues that the FDA’s regulation of bottled water when compared with EPA’s regulation of tap water, reveals key differences in the agencies’ statutory authorities and that states’ requirements to safeguard bottled water often exceed those of FDA, but are still often less comprehensive than state requirements to safeguard tap water.

Wildlife in a Changing World: An analysis of the 2008 IUCN Red List of Threatened Species

This International Union for Conservation of Nature (IUCN) supplement to the IUCN Red Book covers the statistics behind the bare listing in the Red book and broadens the discussion to include ecological support for endangered and threatened species.

RESPONSIBLE LEADERSHIP FOR A SUSTAINABLE FUTURE

This agreement by the G-8 nations in partnership with developing nations sets fortht he understanding that world temperature rise should not exceed 2 degrees Celsius by 2050. However, no short terms measures to assure such an outcome were agreed to.