Notes & Sources

1 Unless otherwise noted, all dollar values for the economic impacts are in real 2000 dollars, and energy prices are in real 2004 dollars.

2 Energy Information Administration, Annual Energy Outlook 2006, DOE/EIA-0383(2006)(Washington, DC, February 2006), web site www.eia.doe.gov/oiaf/aeo/index.html.

3 Energy Information Administration, Impacts of Modeled Recommendations of the National Commission on Energy Policy, SR/OIAF/2005-02 (Washington, DC, April 2005), web site http://www.eia.doe.gov/oiaf/servicerpt/bingaman/pdf/sroiaf(2005)02.pdf Also, Energy Information Administration, Energy Market Impacts of Alternative Greenhouse Gas Intensity Reduction Goals, SR/OIAF/2006-01 (Washington, DC, March 2006), web site http://www.eia.doe.gov/oiaf/servicerpt/agg/pdf/sroiaf(2006)01.pdf

4 For example, see Energy Information Administration, Analysis of S.139, the Climate Stewardship Act of 2003, SR/OIAF/2003-02, (Washington, DC, June 2003), web site www.eia.doe.gov/oiaf/analysispaper/sacsa/index.html, for a description of the emission abatement curves and data sources.

5 Energy Information Administration, The National Energy Modeling System—An Overview 2003, DOE/EIA-0581(2003) (Washington, DC, March 2003), web site www.eia.doe.gov/oiaf/aeo/overview/index.html.

6 Personal communication from Casey Delhotal, of the Environmental Protection Agency, to Daniel Skelly, of the Energy Information Administration, on July 7, 2005.  EIA adjusted the EPA no-measures case projections to extrapolate from the most recent 2002-to-2004 data on these gases as published by EIA, as well as to estimate the intervening years of the projection, since the projections were only provided for every 5 years beginning in 2005 and ending in 2020.  In addition, EIA extrapolated the projection to 2030 based on the average annual growth rates of individual emission sources from 2015 to 2020.

7 The projections of total greenhouse gas emissions in the policy cases cited here and plotted in the figure are gross emissions and do not reflect the offset in emissions from the increase in carbon sequestration induced under Section 7 of the bill.

8 The bill specifies that the growth rate of the safety-valve price based on the growth in the All-Urban Consumer Price Index, plus 1 percentage point.  This nominal dollar safety-valve price assumption is deflated to constant, or real, dollars for analysis purposes based on the projected estimate of the GDP chain-linked price deflator in each policy case.  Because inflation as measured by the GDP price deflator is less than with the CPI, the real dollar safety valve price increases at 1.3 percent per year in the H.R.5049A case and 2.3 percent per year in the H.R.5049B case.

9 The carbon sequestration assumptions in this analysis are the same as used in EIA’s Analysis of S.139, the Climate Stewardship Act of 2003 and already reflect a 50-percent reduction from the estimates of economic potential to account for uncertainty and the likelihood that the market response would be lower than the economic potential.  The carbon sequestration offset estimates in this analysis are similar in magnitude to more recent estimates published in November 2005 by EPA in Greenhouse Gas Mitigation Potential in U.S. Forestry and Agriculture (EPA 430-R-05-006) in its $5-per-ton, constant-price scenarios for 2015 and 2025.

10 Other recipients include State governments, the electric power industry, energy-intensive industries, the Department of State, the Department of Energy, and the U.S. Treasury.  These recipients are presumed to sell their share of the allowances on the open market.  Proceeds would compensate affected parties and provide transition assistance, fund research and development programs, and raise government revenue.

11 While the price increases may be attenuated somewhat by the supply response to reduced fuel demand, which tends to reduce marginal cost of fuel supplied, the overwhelming impact is to increase fuel prices.  For electricity, higher projected prices result not only from higher fossil fuel costs, but also from higher capital costs associated with less carbon-intensive plant additions in the future.

12 Revenues from the sales of allowances are reported in nominal dollars.

13 All dollar values reported in this section and beyond are expressed in real 2000 dollars unless otherwise stated.

14 Energy-intensive manufacturing industries in NEMS include food, paper, inorganic and organic chemicals, resins, agricultural chemicals, petroleum refining, glass, cement, iron and steel, and aluminum.