Your Trillion Dollar Electric Bill

In his long-suppressed and now infamous talk with the San Francisco Chronicle last January, Barack Obama bluntly admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

So, how much is “skyrocket?”  Can we put a dollar figure on that?

Well, last year, Senators Joe Lieberman and John Warner put forward a bipartisan cap-and-trade plan (Senate Bill S.2191, the Lieberman-Warner Climate Security Act of 2007) that is actually less stringent than the plans put forward by Obama.  Earlier this year, the Energy Information Administration conducted – at Senator Lieberman’s request  -an analysis of the costs and potential effects of the bill.  On the completion of the analysis, Senator Lieberman applauded it for its fairness.

The conclusions are stunning:

“Under S. 2191, average annual household energy bills, excluding transportation costs, are between $30 and $325 higher in 2020 and $76 to $723 higher in 2030.”

“OK,” the average ratepayer might think, “30 bucks more in 12 years isn’t so bad.”  But what if it’s the higher number?  Or even, as is more likely, a median number?

But, the individual numbers only tell part of the story.  The real price is in overall effect on Gross Domestic Product:

“Total discounted GDP losses over the 2009 to 2030 time period range from $444 billion to $1,308 billion  . . . the cumulative discounted losses for personal consumption range from $546 billion  to $1,425 billion.”

Gulp.  Ok, after swallowing hard, surely a pricetag of over a trillion dollars is worth it to save the planet.  What do we get on the environment front for foregoing 1.4 trillion in personal consumption?  For all your hard sacrificies you get . . . a fraction of 1 degree in temperature reduction.  And, if the BRIC countries don’t go along with us, we won’t even see that.  Remember, Lieberman applauded this analysis, so its not like it was a political hit piece.

Obama’s plan is even more extensive and, therefore, probably more expensive thatn Lieberman-Warner.  But, don’t lose sleep if this makes you think you voted the wrong way.  McCain’s plan was essentially Lieberman-Warner, so we were taking a hit either way.  Economists call inflation “the cruelest tax.”  Both candidates campaigned as tax-cutters.  They were both cruelly deluding us, if not themselves.