Press Releases

New Analysis Shows Bipartisan Clean Air Bill Beneficial to Economy

Electricity Prices Down under CAPA, according to EIA study

Sep 29 2003

WASHINGTON (Sept. 29, 2003) - A new analysis by the Energy Department's Energy Information Administration shows that the Clean Air Planning Act (S. 843), a bipartisan four-pollutant bill sponsored by Sens. Tom Carper, D-Del., Judd Gregg, R-N.H., Lincoln Chafee, R-R.I., and Lamar Alexander, R-Tenn., would substantially reduce air-pollution emissions while creating economic growth and boosting the electricity sector. The study, which was commissioned by Senate Environment and Public Works Committee Chairman James Inhofe, R-Okla., evaluated the economic impact of both CAPA and the administration's Clear Skies Initiative. Both bills would cut emissions of mercury, sulfur dioxide, and nitrogen oxides, though CAPA's reductions would be implemented more quickly. CAPA would also reduce emissions of carbon dioxide, unlike the president's plan, which is silent on the issue of global warming. The EIA study showed that CAPA does a better job reducing pollutants than Clear Skies -- at a comparable cost to the electricity industry. For instance, under both CAPA and Clear Skies, coal power generation actually increases through 2025, while electricity prices decline, according to the analysis. Natural gas prices, meanwhile, remain essentially the same in 2025 as in 2001, EIA said. "This study disproves critics who contend a four-pollutant, clean-air proposal would harm the economy. Quite the opposite is true," said Senator Carper. "The coal industry, using new technologies, would continue to grow, natural gas prices would remain essentially the same, and electricity prices would actually decline. This report shows that we can save lives, clean up our air, and grow the economy at the same time." "The science is overwhelming in favor of taking action on climate change," said Senator Chafee. Every week, we see more evidence proving that the climate is changing and causing irreparable harm to our planet, as demonstrated most recently by the shrinking Arctic ice shelf and rising ocean levels. The seriousness of the situation demands that we strike a genuine compromise, which I believe this legislation to be. I am pleased that the EIA has concluded that we can make positive strides toward addressing climate change in a cost-effective way." The EIA analysis compared conditions today to those expected in 2025 if CAPA becomes law. It shows that: · Electricity consumption will increase 13 percent (50.75 vs. 37.65 quadrillion BTU per year);
· Coal production, an important source of jobs, increases 8 percent (1,230 vs. 1,138 million tons);
· Natural gas prices remain stable, increasing only 1 percent ($4.16 vs. $4.12 MMBTU);
· Electricity Prices actually fall 2.7 percent (7.1 cents vs. 7.3 cents per kilowatt hour). The analysis also shows that the administrationâ??s bill, which sets a mercury cap of 15 tons in 2018, would fail to achieve that level, and, in fact, mercury emissions would likely resume increasing after a near-term decline. Under Clear Skies, mercury levels in 2025 are predicted to be nearly three times higher than CAPA, coming at 29 tons compared to just 10 tons if CAPA were implemented. The analysis did not estimate any health-impact scenarios. But according to data prepared by the Environmental Protection Agency late last year, CAPA would cost roughly 2 percent to 3 percent more to implement than Clear Skies but would produce substantially greater health benefits. According to an analysis of EPA data, in 2010, CAPA would result in an additional 3,000 more lives saved per year and deliver $20 billion more in additional health benefits. "The EIA and EPA analyses show that we can have a clean air bill that reduces carbon dioxide emissions for essentially the same cost as the administration's substantially weaker clean air bill, while maintaining fuel diversity and keeping electricity prices low," said Senator Carper. "I urge the Bush administration and the Republican majority in the Senate to work with us to pass CAPA as soon as possible."