Three Studies All Find that Long-Term Greenhouse Gas Emissions Limits Can be Met without Harming the U.S. Economy

by Steve Nadel, ACEEE Executive Director

On Tuesday June 15, 2010, three studies were released on the impacts of the American Power Act (APA) as developed by Senators Kerry and Lieberman. The three studies also integrated in all or many aspects of the American Clean Energy Leadership Act (ACELA) as developed by the Senate Energy Committee. All three studies found that impacts of this bill on the U.S. economy would be minimal. The three studies were prepared by the Environmental Protection Agency (EPA), American Council for an Energy-Efficient Economy (ACEEE), and the ClimateWorks Foundation.

On the big picture question of changes in gross domestic product (GDP), the ACEEE study found that APA+ACELA, because of the emphasis on large-scale productive investments in energy efficiency, would increase GDP by a minute amount, ranging from 0-0.13%, depending on the year. Climate Works found that under APA, including some aspects of ACELA, GDP would average $9 billion more over the 2012-2030 period, a very small increase in a multi-trillion dollar economy. EPA, with only a very limited integration of energy efficiency investments in their analysis, found an average $9 billion loss over that same period.

On employment, ACEEE found a gain of about 166,000 jobs in 2030 from APA+ACELA. These job gains increase to 364,000 if energy efficiency provisions are enhanced. Climate Works found gains of 540,000 jobs over the 2012-2030 period from APA, including some aspects of ACELA. EPA did not look at employment.

The one metric all three studies included was household costs and savings. The ACEEE analysis found slight household costs in 2020 ($24 per household) but savings in 2030 (e.g. $256 per household) and beyond as cost-effective energy efficiency measures reduced residential energy bills. The enhanced efficiency scenario had much larger household savings (e.g. $448 per household in 2030). EPA found that household costs would go up slightly under APA, plus some aspects of ACELA, with the next present value cost increase averaging $79-146 per year – a small amount considering that average household income was $52,029 in 2008, according to the Census Bureau (2009 figures not yet available). The Climate Works analysis was in between, finding average household savings of about $70 in 2020 and 2030. The EPA analysis only included some of the energy efficiency savings in the bills, which is likely a major reason why they found small household cost increases instead of savings. More time is needed to figure out why the results varied as much as they do between the three studies, but relative to household income, the differences are small.

The three studies are available here:

• EPA analysis
• ClimateWorks Foundation Study
• ACEEE Analysis