Key Facts about Waxman's Cap-and-Trade Bill,   June 11, 2009

The bill claims it will reduce emissions of capped sources by 83%. But the EPA estimates that reduction will be only 39%. Emitters can exceed the cap by about 200% by buying offsets (mainly foreign) and by another 100% or so by using "banked" permits.

EPA gives "total abatement costs" for domestic covered sources, domestic offsets, and foreign offsets. Domestic costs are not payments for allowance or offsets, since these payments are made to Americans and are not a national cost. Domestics costs are the costs of using less carbon minus the value of saved energy. In 2012, the combined domestic costs are $4.4 billion, while the cost of foreign offsets is 14.5 billion.  Real Cost

EPA finds that "total abatement costs" become more than half domestic only after 2030. By then foreign offsets are costing $29.5B per year.

EPA analyzed the draft bill, which has been amended to increase the limit on foreign offsets from 1 billion to 1.5 billion tonnes per year. EPA found that the limit of 1 billion tonnes would be purchased in every year.

Electric utilities will be given 30% of the permits for free. EPA estimates their first-year value to be 30% of $76B, or $23B. Of these, 37% will be used to reimburse residential customers, and the rest, $14B worth, will go to commercial and industrial customer. The problem is that businesses always pass on their costs (that's how the stay in business), and they will pass on the higher costs of electricity so the they do not need reimbursement from federal carbon revenues.

China and India have nixed caps. Without these caps, Kyoto fails. What can be done?

Carbonomics explains "wrecking" the economy, "peak oil," caps, carbon taxes, and Kyoto.