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Climate Change
Publications and Cost Estimates
All Documents
Cost Estimates
Budget Issues
Cap-and-Trade Design Issues
Science and Overview
Related Issues
All Documents
- The Use of Offsets to Reduce Greenhouse Gases
August 3, 2009
pdf blog
Economic and Budget Issue Brief
- Two Recent Studies of Regional Differences in the Effects of Policies That Would Price Carbon Dioxide Emissions
July 9, 2009
pdf blog
Letter to the Honorable James M. Inhofe
- H.R. 2998, American Clean Energy and Security Act
June 26, 2009
pdf
Cost estimate for the bill as amended and reported by the House Committee on Rules on June 26, 2009
Related:
- The Estimated Costs to Households From the Cap-and-Trade Provisions of H.R. 2454
June 19, 2009
html pdf data blog
Letter to the Honorable Dave Camp
- Responses to Questions About the Cost of a Cap-and-Trade Program
June 12, 2009
html pdf
Letter to the Honorable John F. Kerry
Related:
- Did the 2008 Tax Rebates Stimulate Short-Term Growth?
June 10, 2009
html pdf blog
Economic and Budget Issue Brief
- Preliminary Information on the Budgetary Impact of Distributing Carbon Emission Allowances
May 21, 2009
pdf
Letter to the Honorable Joe Barton
- Assessment of Potential Budgetary Impacts from the Introduction of Carbon Dioxide Cap-and-Trade Policies
May 15, 2009
pdf
Letter to the Honorable Henry A. Waxman
- The Distribution of Revenues from a Cap-and-Trade Program for CO2 Emissions
May 7, 2009
html pdf webcast blog
Testimony before Committee on Finance, United States Senate
- Potential Impacts of Climate Change in the United States
May 2009
html pdf blog
- Background Paper: How CBO Estimates the Costs of Reducing Greenhouse-Gas Emissions
April 2009
pdf blog
Related:
- Flexibility in the Timing of Emission Reductions Under a Cap-and-Trade Program
March 26, 2009
html pdf blog
Testimony before the Committee on Ways and Means, U.S. House of Representatives
- The Distributional Consequences of a Cap-and-Trade Program for CO2 Emissions
March 12, 2009
html pdf webcast blog
Testimony before the Subcommittee on Income Security and Family Support, Committee on Ways and Means, U.S. House of Representatives
- The Role of the 25 Percent Revenue Offset in Estimating the Budgetary Effects of Legislation
January 13, 2009
pdf
Economic and Budget Issue Brief
- Preparing for Our Common Future: Policy Choices and the Economics of Climate Change
October 2008
pdf blog
CBO Director Peter Orszag's presentation for the Goldman Lecture in Economics, Wellesley College
- Climate-Change Policy and CO2 Emissions from Passenger Vehicles
October 6, 2008
html pdf blog
Economic and Budget Issue Brief
- Issues in Designing a Cap-and-Trade Program for Carbon Dioxide Emissions
September 18, 2008
html pdf blog
Testimony before the Committee on Ways and Means, U.S. House of Representatives
- Options for Offsetting the Economic Impact on Low- and Moderate-Income Households of a Cap-and-Trade Program for Carbon Dioxide Emissions
June 17, 2008
pdf blog
Letter to the Honorable Jeff Bingaman
- S. 3036, Lieberman-Warner Climate Security Act of 2008
June 2, 2008
pdf blog
Cost estimate for a substitute amendment for S. 3036 transmitted to CBO on June 2, 2008
- Containing the Cost of a Cap-and-Trade Program for Carbon Dioxide Emissions
May 20, 2008
html pdf webcast blog
Testimony before the Committee on Energy and Natural Resources, United States Senate
- Nuclear Power's Role in Generating Electricity
May 2008
html pdf data blog
- Implications of a Cap-and-Trade Program for Carbon Dioxide Emissions
April 24, 2008
html pdf webcast blog
Testimony before the Committee on Finance, United States Senate
- S. 2191, America's Climate Security Act of 2007, with an amendment
April 10, 2008
pdf blog
Cost estimate for the bill as ordered reported by the Senate Committee on Environment and Public Works on December 5, 2007, with a proposed amendment transmitted to CBO on April 9, 2008
Related:
- Policy Options for Reducing CO2 Emissions
February 2008
html pdf blog
- Costs of Reprocessing Versus Directly Disposing of Spent Nuclear Fuel
November 14, 2007
html pdf webcast
Testimony before the Committee on Energy and Natural Resources, United States Senate
- Approaches to Reducing Carbon Dioxide Emissions
November 1, 2007
html pdf webcast
Testimony before the Committee on the Budget, U.S. House of Representatives
- The Potential for Carbon Sequestration in the United States
September 2007
pdf
- Supplemental Information About Trade-Offs in Allocating Allowances for CO2 Emissions
July 9, 2007
html pdf
Letter to the Honorable Jeff Bingaman
- Trade-Offs in Allocating Allowances for CO2 Emissions
April 25, 2007
html pdf
- Evaluating the Role of Prices and R&D in Reducing Carbon Dioxide Emissions
September 2006
pdf
- China's Growing Demand for Oil and Its Impact on U.S. Petroleum Markets
April 2006
pdf
- CBO's Comments on the White Paper "Design Elements of a Mandatory Market-Based Greenhouse Gas Regulatory System"
March 13, 2006
pdf
Letter to the Honorable Jeff Bingaman
- Limiting Carbon Dioxide Emissions: Prices Versus Caps
March 15, 2005
html pdf
- Uncertainty in Analyzing Climate Change: Policy Implications
January 2005
html pdf
- The Economic Costs of Fuel Economy Standards Versus a Gasoline Tax
December 2003
html pdf
Related:
- Issues in the Design of a Cap-and-Trade Program for Carbon Emissions
November 25, 2003
html pdf
- Prospects for Distributed Electricity Generation
September 2003
html pdf
- Shifting the Cost Burden of a Carbon Cap-and-Trade Program
July 2003
html pdf
- The Economics of Climate Change: A Primer
April 2003
html pdf
Related:
- S. 556, Clean Power Act of 2002
November 18, 2002
html pdf
Cost estimate for the bill as ordered reported by the Senate Committee on Environment and Public Works on June 27, 2002
- An Evaluation of Cap-and-Trade Programs for Reducing U.S. Carbon Emissions
June 2001
html pdf
- Who Gains and Who Pays Under Carbon-Allowance Trading?
June 2000
html pdf
- Climate Change and the Federal Budget
August 1998
html pdf
All Documents
- The Use of Offsets to Reduce Greenhouse Gases
August 3, 2009
pdf blog
Economic and Budget Issue Brief
- Two Recent Studies of Regional Differences in the Effects of Policies That Would Price Carbon Dioxide Emissions
July 9, 2009
pdf blog
Letter to the Honorable James M. Inhofe
- H.R. 2998, American Clean Energy and Security Act
June 26, 2009
pdf
Cost estimate for the bill as amended and reported by the House Committee on Rules on June 26, 2009
Related:
- The Estimated Costs to Households From the Cap-and-Trade Provisions of H.R. 2454
June 19, 2009
html pdf data blog
Letter to the Honorable Dave Camp
- Responses to Questions About the Cost of a Cap-and-Trade Program
June 12, 2009
html pdf
Letter to the Honorable John F. Kerry
Related:
- Did the 2008 Tax Rebates Stimulate Short-Term Growth?
June 10, 2009
html pdf blog
Economic and Budget Issue Brief
- Preliminary Information on the Budgetary Impact of Distributing Carbon Emission Allowances
May 21, 2009
pdf
Letter to the Honorable Joe Barton
- Assessment of Potential Budgetary Impacts from the Introduction of Carbon Dioxide Cap-and-Trade Policies
May 15, 2009
pdf
Letter to the Honorable Henry A. Waxman
- The Distribution of Revenues from a Cap-and-Trade Program for CO2 Emissions
May 7, 2009
html pdf webcast blog
Testimony before Committee on Finance, United States Senate
- Potential Impacts of Climate Change in the United States
May 2009
html pdf blog
- Background Paper: How CBO Estimates the Costs of Reducing Greenhouse-Gas Emissions
April 2009
pdf blog
Related:
- Flexibility in the Timing of Emission Reductions Under a Cap-and-Trade Program
March 26, 2009
html pdf blog
Testimony before the Committee on Ways and Means, U.S. House of Representatives
- The Distributional Consequences of a Cap-and-Trade Program for CO2 Emissions
March 12, 2009
html pdf webcast blog
Testimony before the Subcommittee on Income Security and Family Support, Committee on Ways and Means, U.S. House of Representatives
- The Role of the 25 Percent Revenue Offset in Estimating the Budgetary Effects of Legislation
January 13, 2009
pdf
Economic and Budget Issue Brief
- Preparing for Our Common Future: Policy Choices and the Economics of Climate Change
October 2008
pdf blog
CBO Director Peter Orszag's presentation for the Goldman Lecture in Economics, Wellesley College
- Climate-Change Policy and CO2 Emissions from Passenger Vehicles
October 6, 2008
html pdf blog
Economic and Budget Issue Brief
- Issues in Designing a Cap-and-Trade Program for Carbon Dioxide Emissions
September 18, 2008
html pdf blog
Testimony before the Committee on Ways and Means, U.S. House of Representatives
- Options for Offsetting the Economic Impact on Low- and Moderate-Income Households of a Cap-and-Trade Program for Carbon Dioxide Emissions
June 17, 2008
pdf blog
Letter to the Honorable Jeff Bingaman
- S. 3036, Lieberman-Warner Climate Security Act of 2008
June 2, 2008
pdf blog
Cost estimate for a substitute amendment for S. 3036 transmitted to CBO on June 2, 2008
- Containing the Cost of a Cap-and-Trade Program for Carbon Dioxide Emissions
May 20, 2008
html pdf webcast blog
Testimony before the Committee on Energy and Natural Resources, United States Senate
- Nuclear Power's Role in Generating Electricity
May 2008
html pdf data blog
- Implications of a Cap-and-Trade Program for Carbon Dioxide Emissions
April 24, 2008
html pdf webcast blog
Testimony before the Committee on Finance, United States Senate
- S. 2191, America's Climate Security Act of 2007, with an amendment
April 10, 2008
pdf blog
Cost estimate for the bill as ordered reported by the Senate Committee on Environment and Public Works on December 5, 2007, with a proposed amendment transmitted to CBO on April 9, 2008
Related:
- Policy Options for Reducing CO2 Emissions
February 2008
html pdf blog
- Costs of Reprocessing Versus Directly Disposing of Spent Nuclear Fuel
November 14, 2007
html pdf webcast
Testimony before the Committee on Energy and Natural Resources, United States Senate
- Approaches to Reducing Carbon Dioxide Emissions
November 1, 2007
html pdf webcast
Testimony before the Committee on the Budget, U.S. House of Representatives
- The Potential for Carbon Sequestration in the United States
September 2007
pdf
- Supplemental Information About Trade-Offs in Allocating Allowances for CO2 Emissions
July 9, 2007
html pdf
Letter to the Honorable Jeff Bingaman
- Trade-Offs in Allocating Allowances for CO2 Emissions
April 25, 2007
html pdf
- Evaluating the Role of Prices and R&D in Reducing Carbon Dioxide Emissions
September 2006
pdf
- China's Growing Demand for Oil and Its Impact on U.S. Petroleum Markets
April 2006
pdf
- CBO's Comments on the White Paper "Design Elements of a Mandatory Market-Based Greenhouse Gas Regulatory System"
March 13, 2006
pdf
Letter to the Honorable Jeff Bingaman
- Limiting Carbon Dioxide Emissions: Prices Versus Caps
March 15, 2005
html pdf
- Uncertainty in Analyzing Climate Change: Policy Implications
January 2005
html pdf
- The Economic Costs of Fuel Economy Standards Versus a Gasoline Tax
December 2003
html pdf
Related:
- Issues in the Design of a Cap-and-Trade Program for Carbon Emissions
November 25, 2003
html pdf
- Prospects for Distributed Electricity Generation
September 2003
html pdf
- Shifting the Cost Burden of a Carbon Cap-and-Trade Program
July 2003
html pdf
- The Economics of Climate Change: A Primer
April 2003
html pdf
Related:
- S. 556, Clean Power Act of 2002
November 18, 2002
html pdf
Cost estimate for the bill as ordered reported by the Senate Committee on Environment and Public Works on June 27, 2002
- An Evaluation of Cap-and-Trade Programs for Reducing U.S. Carbon Emissions
June 2001
html pdf
- Who Gains and Who Pays Under Carbon-Allowance Trading?
June 2000
html pdf
- Climate Change and the Federal Budget
August 1998
html pdf
Cost Estimates
- H.R. 2998, American Clean Energy and Security Act
June 26, 2009
pdf
Cost estimate for the bill as amended and reported by the House Committee on Rules on June 26, 2009
Related:
- S. 3036, Lieberman-Warner Climate Security Act of 2008
June 2, 2008
pdf blog
Cost estimate for a substitute amendment for S. 3036 transmitted to CBO on June 2, 2008
- S. 2191, America's Climate Security Act of 2007, with an amendment
April 10, 2008
pdf blog
Cost estimate for the bill as ordered reported by the Senate Committee on Environment and Public Works on December 5, 2007, with a proposed amendment transmitted to CBO on April 9, 2008
Related:
- S. 556, Clean Power Act of 2002
November 18, 2002
html pdf
Cost estimate for the bill as ordered reported by the Senate Committee on Environment and Public Works on June 27, 2002
Cap-and-Trade Design Issues
- The Use of Offsets to Reduce Greenhouse Gases
August 3, 2009
pdf blog
Economic and Budget Issue Brief
- Two Recent Studies of Regional Differences in the Effects of Policies That Would Price Carbon Dioxide Emissions
July 9, 2009
pdf blog
Letter to the Honorable James M. Inhofe
- The Estimated Costs to Households From the Cap-and-Trade Provisions of H.R. 2454
June 19, 2009
html pdf data blog
Letter to the Honorable Dave Camp
- Responses to Questions About the Cost of a Cap-and-Trade Program
June 12, 2009
html pdf
Letter to the Honorable John F. Kerry
Related:
- The Distribution of Revenues from a Cap-and-Trade Program for CO2 Emissions
May 7, 2009
html pdf webcast blog
Testimony before Committee on Finance, United States Senate
- Flexibility in the Timing of Emission Reductions Under a Cap-and-Trade Program
March 26, 2009
html pdf blog
Testimony before the Committee on Ways and Means, U.S. House of Representatives
- The Distributional Consequences of a Cap-and-Trade Program for CO2 Emissions
March 12, 2009
html pdf webcast blog
Testimony before the Subcommittee on Income Security and Family Support, Committee on Ways and Means, U.S. House of Representatives
- Issues in Designing a Cap-and-Trade Program for Carbon Dioxide Emissions
September 18, 2008
html pdf blog
Testimony before the Committee on Ways and Means, U.S. House of Representatives
- Options for Offsetting the Economic Impact on Low- and Moderate-Income Households of a Cap-and-Trade Program for Carbon Dioxide Emissions
June 17, 2008
pdf blog
Letter to the Honorable Jeff Bingaman
- Containing the Cost of a Cap-and-Trade Program for Carbon Dioxide Emissions
May 20, 2008
html pdf webcast blog
Testimony before the Committee on Energy and Natural Resources, United States Senate
- Implications of a Cap-and-Trade Program for Carbon Dioxide Emissions
April 24, 2008
html pdf webcast blog
Testimony before the Committee on Finance, United States Senate
- Policy Options for Reducing CO2 Emissions
February 2008
html pdf blog
- Trade-Offs in Allocating Allowances for CO2 Emissions
April 25, 2007
html pdf
- Supplemental Information About Trade-Offs in Allocating Allowances for CO2 Emissions
July 9, 2007
html pdf
Letter to the Honorable Jeff Bingaman
- Limiting Carbon Dioxide Emissions: Prices Versus Caps
March 15, 2005
html pdf
- CBO's Comments on the White Paper "Design Elements of a Mandatory Market-Based Greenhouse Gas Regulatory System"
March 13, 2006
pdf
Letter to the Honorable Jeff Bingaman
- Issues in the Design of a Cap-and-Trade Program for Carbon Emissions
November 25, 2003
html pdf
- Shifting the Cost Burden of a Carbon Cap-and-Trade Program
July 2003
html pdf
- An Evaluation of Cap-and-Trade Programs for Reducing U.S. Carbon Emissions
June 2001
html pdf
- Who Gains and Who Pays Under Carbon-Allowance Trading?
June 2000
html pdf
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From the Director
Global climate change is one of the nation's most significant long-term policy challenges: Human activities are producing increasingly large quantities of greenhouse gases, particularly carbon dioxide, and their accumulation in the atmosphere is expected to affect regional climates throughout the world. Although the economic and social costs from climate change remain highly uncertain, there is some risk that they will turn out to be quite large. The associated risks could be reduced by policies that reduced emissions of greenhouse gases.
Efforts to limit greenhouse-gas emissions probably would yield long-term economic benefits by avoiding damages from climate change in the future, but they also would impose economic costs now, primarily by restricting the use of fossil fuels. Those costs could be minimized by policies that provided broad incentives to reduce emissions, relying on markets to do so where it was most economically efficient. Different incentive-based approaches could have substantially different effects both on economic efficiency and on equity (that is, on how the costs were distributed among businesses and individuals).
One approach would be to levy a gradually rising tax on sellers or consumers of fossil fuels in proportion to the carbon dioxide emitted in burning those fuels. Another approach would be to establish a "cap-and-trade" program: The government would set gradually tightening limits on emissions, issue rights (or allowances) corresponding to those limits, and then allow firms to trade the allowances.
Either approach would create an incentive to reduce emissions at a lower cost than "command and control" regulations that specify when, where, and possibly how, emission reductions must take place. But not all incentive-based policies would be equally cost-effective. Policies that allowed individuals and firms flexibility to cut emissions less in years when it was costly to do so (for instance, because of an unusually cold winter or a disruption in energy markets) while motivating them to undertake greater reductions in relatively low-cost years, could reduce the cost of meeting a long-term target for emissions.
On the basis of various proposals recently considered by the Congress, emission allowances (or emission tax revenues) might be worth between $50 billion and $300 billion per year (in 2007 dollars) by 2020. How policymakers decided to allocate allowances (or use the revenues) would influence the impact of the policy on the economy, businesses, and individuals. Given the potential value of the allowances and their liquidity, CBO decided that the value of allowances given away by the government should be reflected in the federal budget. Cost estimates should show, both as revenues and outlays, the value of any allowances created and distributed at no cost to the recipient.
CBO has a team of economists, budget analysts, and other policy specialists examining the economic and budgetary consequences of climate change. This web page provides links to many of the agency's documents and activities on the topic.
From the Director's Blog
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