Conquering Cost: Optimal Policy Approaches to the Cost of Climate Change Workshop Briefing Memo

Author(s): Jan Mazurek, Brian C. Murray, and Lydia P. Olander

Published: July 2009

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Last month, the U.S. House of Representatives narrowly passed a wide-ranging energy and climate bill with the first-ever greenhouse gas cap-and-trade measure to emerge from that chamber. The American Clean Energy and Security Act of 2009 (H.R. 2454) sets a cap that covers about 85% of U.S. total greenhouse gas emissions and virtually all emissions from the combustion of fossil fuels (U.S. Environmental Protection Agency [EPA] 2009). Costs of complying with the bill were at the center of the House debate in large part due to lingering concerns about the state of the economy. As the Senate now considers comparable efforts to pass comprehensive energy and climate legislation, cost concerns will remain critical and, if they are not dealt with effectively, threaten to stall legislation.