Cost Families $1,042 per Year, Wealthiest Americans to Benefit

Washington, DC – U.S. Senator Lindsey Graham may no longer claim allegiance to the climate bill currently being debated in the Senate, but according to a new independent analysis released this week, the cap-and-trade proposal being advanced by Senators Kerry and Lieberman does no better by the American consumer than previous iterations of the bill that bore his name.

In an effort to better understand the broad consequences of the Kerry-Lieberman American Power Act on the U.S. economy, the Institute for Energy Research commissioned Chamberlain Economics, L.L.C to perform an economic and distributional analysis of cap-and-trade portion of the proposal.

The following represent some of the study’s major findings:

• The American Power Act would reduce U.S. employment by roughly 522,000 jobs in 2015, rising to over 5.1 million jobs by 2050.
• Households would face a gross annual burden of $125.9 billion per year or $1,042 per household, with costs disproportionately borne by low-income households.
• On a net basis, the top income quintile will benefit financially, redistributing to these households roughly $12.3 billion per year from the bottom 80 percent of earners.
• Households over age 75 bear the largest burden at 2.3 percent of income, followed by households aged 65-74 and under age 25 at 2.1 percent. By contrast, the nation’s highest-earning households between age 45 and 54 years would bear the smallest percentage burden of just 1.5 percent.
• Contrary to the legislation’s stated goal of reducing price volatility by excluding petroleum refiners from quarterly auctions, the Kerry-Lieberman bill is likely to significantly increase allowance price volatility from quarter to quarter, compared to an ordinary auction in which all covered industries bid for allowances.