In an analysis of bills before the U.S. Congress, New Carbon Finance research economists based in New York, Washington, D.C. and London predict that in 12 years, a carbon-constrained U.S. economy that includes a cap-and-trade system allowing only domestic trades will produce:
– a $1 trillion carbon trading market, which is more than twice the size of the European Union's emissions trading scheme,
– a carbon price of $40 per ton as soon as 2015, which will result in a rise in consumer energy prices in real terms of roughly 20% for electricity, 12% for gasoline and 10% for natural gas, as well as impacts on other prices as higher energy and transportation costs filter through the economy; and
– major U.S. investments in renewable energy, energy efficiency and greenhouse gas mitigation projects and technologies.
New Carbon Finance says that most of the 13 climate change bills being discussed in the U.S. House of Representatives and Senate propose some sort of market-based mechanism such as a cap-and-trade system, complemented by direct regulation.
‘Even if the current Bush administration rejects all of these bills, the next president will be less inclined to use a veto,’ says Michael Liebreich, CEO of New Energy Finance, parent company of New Carbon Finance.