How Much Will Waxman-Markey Cost You?


Joy of joys, I woke up this morning to find that the Congressional Budget Office answered this question. From the CBO's new per-household cost estimate (pdf):

[T]he Congressional Budget Office (CBO) estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion -- or about $175 per household.

This does not include the potential economic benefits of slowing climate change. Still, I think it's worth noting that the net cost here is about one tenth of what Martin Feldstein thought it would be:

The Congressional Budget Office estimates that reducing the level of CO2 to 15 percent less than the total level of U.S. emissions in 2005 would require permit prices that would increase the cost of living of a typical household by $1,600 a year ... The Waxman-Markey bill that recently passed the House Energy and Commerce Committee would cause an even greater initial rise in the cost of living by its requirement to cut CO2 emissions to 17 percent less than the 2005 level of emissions rather than the 15 percent reduction assumed in the CBO estimates.

Update: CBO link is fixed. (Happily, It no longer goes to my gmail account.)

Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

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