CBO Brief on Costs of Cap and Trade

In an Economic and Budget Issue Brief released today, the Congressional Budget Office reviews various aspects of the costs of achieving greenhouse gas emissions reductions. Here's a take-away from the conclusion:

CBO concluded that under H.R. 2454 the loss of aggregate purchasing power would increase from about 0.1 percent in 2012 to 0.8 percent in 2050. Those losses would be distributed in ways that tend to benefit lower-income households. In 2020, households in the highest income quintile would see a loss in purchasing power of 0.1 percent of after-tax income, and households in the middle quintile would experience a loss equivalent to 0.6 percent. Households in the lowest quintile, by contrast, would see an average gain of 0.7 percent. By 2050, households in the highest quintile would see a loss in purchasing power of 0.7 percent of after-tax income, and households in the middle quintile would see a loss of 1.1 percent. Those in the lowest quintile would see a 2.1 percent increase.

H.R. 2454 is the American Clean Energy and Security Act of 2009, also known as Waxman-Markey (it's nowhere near as good as H.R. 1862, the Cap and Dividend Act of 2009 introduced by Rep. Van Hollen, which is considerably shorter, clearer, auctions all permits, and distributes all of the proceeds minus administrative costs to every legal resident on a monthly basis). Good to remember the next time some know-nothing congressperson emotes about the huge cost of cap and trade legislation to the people that he or she claims to care so deeply about.
(thanks to Jim Boyce for the tip about the Van Hollen bill)