Climate Change: Costs and Benefits of the Cap-and-Trade Provisions of H.R. 2454

This report examines seven studies that project the costs of H.R. 2454 to 2030 or beyond. It is difficult (and some would consider it unwise) to project costs up to the year 2030, much less beyond. The already tenuous assumption that current regulatory standards will remain constant becomes more unrealistic as time goes forward, and other unforeseen events (such as technological breakthroughs) loom as critical issues which cannot be modeled. Hence, long-term cost projections are at best speculative, and should be viewed with attentive skepticism. The finer and more detailed the estimate presented, the greater the skepticism should be. In the words of the late Dr. Lincoln Moses, the first Administrator of the Energy Information Administration: “There are no facts about the future.”

But if models cannot reliably predict the future, they can indicate the sensitivity of a program’s provisions to varying economic, technological, and behavioral assumptions that may assist policymakers in designing a greenhouse gas reduction strategy. The various cases examined here do provide some important insights on the costs and benefits of H.R. 2454 and its many provisions.