The proposed American Clean Energy and Security Act of 2009, better known as the Waxman-Markey climate bill, is economically sound and may have benefits worth twice as much as the cost to implement it, an analysis has found.

Special interest groups, as well as federal agencies that include the Environmental Protection Agency (EPA) and the Energy Information Administration, have attempted to estimate the costs associated with HR 2454, the proposed greenhouse gas (GHG) legislation. New York University School of Law’s Institute for Policy Integrity attempted to determine the proposed legislation’s benefits in a policy brief titled “The Other Side of the Coin: The Economic Benefits of Climate Legislation.”

Authors J. Scott Holladay and Jason A. Schwartz determined that “from almost any perspective and under almost any assumption, HR 2454 is a good investment for the United States to make in our own economic future and in the future of the planet.” The authors focused on the worth of a ton of carbon — not from its price on a carbon exchange, but rather how much a ton of carbon not emitted to the atmosphere would be worth to society in avoiding climate change. Their estimate: around $19/ton.

The authors used data provided by EPA and new calculations of the damages from GHG emissions, which they said were recently developed by a federal interagency task force.

“The results indicate that HR 2454 is cost-benefit justified under most reasonable assumptions” for the “social cost of carbon,” or SCC, wrote the duo. “The break-even social cost of carbon, above which the legislation is cost-benefit justified, ranges from $7.70 to $8.97. These figures are in the very low end of the range of SCC values considered by the interagency review process. Using conservative assumptions, the benefits of HR 2454 could likely exceed the costs by as much as nine to one, or more.”

The estimated benefits, said the authors, “do not include a significant number of ancillary and unquantified benefits,” which might include reducing other pollutants, such as sulfur dioxide and nitrogen dioxide; the prevention of species extinction; and lower maintenance costs for energy infrastructure. “Due to those limitations, the benefits estimates should be considered to be very conservative.”.

EPA needs to “conduct a full, formal analysis of the benefits of climate legislation, including whether alternate and more stringent climate policies might be even more cost-benefit justified,” the brief said.

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