Changes to Daily Life Under Cap and Trade Will be Gradual, Experts Say

Posted by Charlotte LoBuono on December 2, 2009 at 11:14 am

Cap and trade would likely increases Americans’ electric bills, but could also lead to dividend checks from utilities to consumers. (image: t. magnum via flickr.com)

Experts believe that Americans’ day-to-day lives will not change noticeably as the U.S. works toward President Obama’s recently announced goal of reducing carbon dioxide emissions by one-sixth, an Associated Press article reported on Friday. At the U.N.-sponsored climate change summit next week in Copenhagen, the White House will commit the U.S. to a goal of cutting carbon dioxide emissions in 2010 to about 17 percent below 2005 levels. According to the Department of Energy, this goal would bring emissions to about 12.5 percent below 2008 levels. The president also set a goal of reducing emissions by 83 percent by 2050, which is what European countries want.

Experts say that although such cuts may mean higher energy bills, they might also mean fewer deaths from air pollution and a utility dividend check at the end of the year. But mostly, they say, the changes will be so small that the general public will not even notice.

Michael Oppenheimer, a professor of geosciences and international affairs at Princeton, likened the changes that would occur under Obama’s 2020 target with the changes in refrigerators over the past 30 years. Without consumers noticing, refrigerators have become about three times more energy efficient. Oppenheimer told the AP that the only time people really notice is when they buy a refrigerator, because they are more expensive, or when they notice the savings on their utility bill.

Other possible effects of carbon-reduction plans Oppenheimer mentioned included cars made of different materials, with bigger cars becoming more costly while smaller cars may be built to be more comfortable.

On Nov. 25, public health officials from all over the world released studies which found that reducing greenhouse gas emissions according to the goals outlined by President Obama could save millions of lives by reducing air pollution. Study investigators and health officials said that cutting carbon dioxide pollution and encouraging more exercise and less meat consumption to reduce emissions would reduce worldwide deaths from heart and lung diseases.

As stated in the AP article, the latest proposal for the cap and trade system of pollution credits involves auctioning off the right to pollute, with the proceeds returned to consumers. John Reilly, associate director of MIT’s Joint Program on the Science and Policy of Global Change, said that although consumers would pay more in monthly utility bills, they could then receive refund checks from the utilities at the end of the year as utilities begin to reduce their emissions. These refund checks would offset an increase in prices.

The discussion in the AP article of the costs of and lifestyle changes brought about by climate change legislation is just the latest development in a heated debate about the true cost to consumers and industry of a cap and trade system. The cap and trade provisions of the Waxman-Markey bill, and its impact on both refiners and consumers alike, are particularly controversial.

The size of the cap and trade burden shouldered by the average American depends on who you ask. On Sept. 10, HeatingOil.com’s Gregg Gethard reported that the NYU Law School Institute for Policy Integrity released a study that found the benefits of cap and trade “far outweigh” its costs, and Steven Zweig wrote on Sept. 23 that cost estimates for the Waxman-Markey cap and trade program are “all over the map,” and range anywhere from $968 to $1,936 per family per year. However, Zweig also said that although the benefits of Waxman-Markey’s cap and trade program are global, the costs are local. If cap and trade legislation results in $1.5 trillion in benefits, as calculated in the NYU study, these benefits will be distributed among the world’s 6 billion people. Unfortunately, the $660 billion in costs are paid by the Untied State’s 300 million people. In that model, each American would accrue $2,200 in costs, but receive only $250 in benefits.