Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., co-authors of the American Power Act (APA), highlighted new scoring from the Congressional Budget Office (CBO) showing climate change legislation could reduce the U.S. deficit by approximately $19 billion over 10 years.
‘Today, the Congressional Budget Office has sent Congress a powerful message: Our comprehensive energy and climate bill will slash America's deficit by over $19 billion,’ said Kerry and Lieberman in a statement. ‘There is no more room for excuses – this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon. Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it.’
The APA would make a number of changes in energy and environmental policies largely aimed at reducing emissions of gases that contribute to global warming. The bill would limit or cap the quantity of certain greenhouse gases (GHGs) emitted from facilities that generate electricity and from other industrial activities beginning in 2013 or for certain entities by 2016.
The Environmental Protection Agency (EPA) would establish two separate cap-and-trade programs – one covering emissions of most types of GHGs and one covering hydrofluorocarbons (HFCs). The EPA would issue allowances to emit those gases under the cap-and-trade programs.
CBO and the Joint Committee on Taxation (JCT) estimate that enacting this legislation would increase revenues by about $751 billion over the 2011-2020 period and direct spending by $732 billion over that 10-year period. In total, CBO and JCT estimate that enacting the legislation would reduce future deficits by about $19 billion over the 2011-2020 period.
CBO estimates that enacting this legislation would not increase the deficit in any of the four 10-year periods following 2020 because additional direct spending would be less than the additional net revenues attributable to the legislation in each of those periods.
The impact on revenues of the APA over the next 10 years would largely result from the revenues collected from the GHG and HFC cap-and-trade programs, net of reductions in revenues from income and payroll taxes.
A small amount of additional revenue would be generated by assessments levied by the Carbon Storage Research Corp. and from penalties collected for noncompliance. The net revenue generated by the cap-and-trade programs over this period would be offset by various tax credits, including credits to support the generation of nuclear power, a refundable credit for working families and expanded use of existing tax benefits that promote renewable energy technologies.