The EPA has just released its analysis (38 pg pdf) of Economic Impacts of S. 1733: The Clean Energy Jobs and American Power Act of 2009.
To sum up a lengthy report: costs are nominal and similar to those of the Waxman-Markey bill. The report only briefly touches on the higher costs that the United States will face if a climate bill is not passed. And it omits the benefits. However, President Obama touched upon those benefits earlier today -- the immense benefits of innovation, American can-do spirit, and global economic competitiveness.
The EPA concludes that Kerry-Boxer's overall impact will be similar to that of Waxman-Markey on four key points:
Four key messages from the EPA analysis of H.R. 2454 would remain unchanged:
(1) the cap-and-trade policies outlined in these bills would transform the way the United States produces and uses energy;
(2) the average loss in consumption per household will be relatively low, on the order of hundreds of dollars per year in the main policy case;
(3) the impacts of climate policy are likely to vary comparatively little across geographic regions;
and (4) what we assume about the actions of other countries has much greater implications for the overall impact of the policy than the modeled differences between the two bills.
The EPA concludes that the Kerry-Boxer bill is likely to have slightly higher costs than Waxman-Markey, although it doesn't attempt to quantify "slightly." It also has some interesting comments on whether allowances should be given away or auctioned off, which will be the subject of a separate arcane and technical diary.
While this analysis doesn’t quantify the impacts of higher temperatures and other effects of increasing GHG concentrations, the U.S. Global Change Research Program (in its June 2009 report, "Global Climate Change Impacts in the United States") described the impacts that we are already seeing and that are likely to dramatically increase this century if we allow global warming to continue unchecked. In the report, it documents how communities throughout America would experience increased costs, including from more sustained droughts, increased heat stress on livestock, more frequent and intense spring floods, and more frequent and intense forest wildfires.
The EPA report does not discuss the benefits of passing comprehensive climate legislation. Those benefits were outlined by President Obama earlier today, when he told MIT students and faculty:
Countries on every corner of this Earth now recognize that energy supplies are growing scarcer, energy demands are growing larger, and rising energy use imperils the planet we will leave to future generations. And that's why the world is now engaged in a peaceful competition to determine the technologies that will power the 21st century. From China to India, from Japan to Germany, nations everywhere are racing to develop new ways to producing and use energy. The nation that wins this competition will be the nation that leads the global economy. I am convinced of that. And I want America to be that nation. It's that simple.
It is that simple. Pass Kerry-Boxer now, and nominal costs of a few hundred dollars a year will be offset by the benefits of renewing the promise of America. Or dither about those nominal costs, and face rising costs for food, water, fire protection, flood insurance, health, and an uncertain future.
Update: Senator Boxer also released a Chairperson's Mark of the bill at around the same time. It's too complicated for me to grasp at this hour, so instead I'll just link to a piece by David Roberts at Grist (who, btw, is an excellent and thoughtful writer) for details.