This assessment is an update to a previous analysis released on May 19, 2009 and includes an assessment of the substitute to H.R. 2454 , the American Clean Energy and Security Act of 2009 (ACESA) and H.R. 1862, the Cap and Dividend Act of 2009 (CDA) sponsored by Congressman Van Hollen. To account for the effects of different components of these proposals, reduction estimates are divided into three scenarios:
- Total emission reductions under just the proposed emissions caps. This scenario is applied to both proposals considered in this analysis.
- The remaining two scenarios are applied only to the ACESA as the CDA does not contain complimentary policies:
- Total emission reductions under the caps and all other complementary requirements, including emission performance standards for uncapped sources and required components of the supplemental reduction program through 2025.
- A range of potential additional reductions that could be achieved through the 1.25 offset requirement for international offsets and supplemental reductions beyond 2025.
- The emissions caps in the ACESA and the CDA achieve reductions of 15 and 14 percent respectively relative to 2005 levels in 2020, roughly equal to 1990 levels. By 2050, the ACESA achieves reductions of 73 percent relative to 2005 levels and the CDA achieves reductions of 66 percent relative to 2005 levels.
- All of the emission reduction components contained in the recent substitute to the ACESA remain consistent with previous iterations of the proposal and in turn result in the same emission reduction estimates as have been reported previously. Specifically:
- When all complementary requirements of the ACESA are considered in addition to the caps, GHG emissions would be reduced 28 percent relative to 2005 levels by 2020 and 75 percent relative to 2005 levels by 2050.
- When additional potential emission reductions are considered, the ACESA could achieve maximum reductions of up to 33 percent relative to 2005 levels by 2020 and up to 81 percent relative to 2005 levels by 2050. The actual amount of reductions will depend on the quantity of international offsets used for compliance.
“Emission Reductions Under Cap-and-Trade Proposals in the 111th Congress, 2005-2050” graphically presents total GHG reductions achieved by H.R.1862 and H.R.2454 relative to U.S. historic and projected emissions under the three reduction scenarios.
“Estimates of Total GHG Emissions and Emission Reductions Achieved by Cap-and-Trade Proposals in the 111th Congress, 2005-2050” presents a table of total GHG reductions by these proposals for selected years.
Table 1. Estimates of Total GHG Emissions and Emission Reductions Achieved by Cap-and-Trade Proposals in the 111th Congress, 2005-2050.