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Tuesday, March 30, 2010

APA Opposes EPA Endangerment Finding in New Report

AAEA Respectfully Submits: APA Report Omits Potential Benefits Of EPA Endangerment Finding

The Affordable Power Alliance (APA) has issued a new report entitled, "Potential Impact of the EPA Endangerment Finding On Low Income Groups and Minorities" (Summary), which concludes that:

"...the CO2 restrictions implied in the EPA regulation would have serious economic, employment, and energy market impacts at the national level and for all states, and that the impacts on low-income groups, the elderly, African Americans, and Hispanics would be especially severe."

The report, which was prepared by Management Information Services, Inc (MIS), estimated that implementation of the EPA Finding would:

 Significantly reduce U.S. GDP every year over the next two decades, and by 2030 GDP would be about $500 billion less than in the reference case – which assumed no EPA carbon restrictions.

 Significantly reduce U.S. employment over the next two decades, and by 2030 would result in the loss of 2.5 million jobs

 Significantly reduce U.S. household incomes over the next two decades, and by 2030 average household income would be reduced by about
$1,200 annually
The report states that the EPA carbon restrictions would greatly increase U.S. energy costs, and
by 2030 these increases (above the reference case) could total:

 50 percent for gasoline prices
 50 percent for residential electricity prices
 75 percent for industrial electricity prices
 75 percent for residential natural gas prices
 100 percent for industrial natural gas prices
 40 percent for jet fuel prices
 40 percent for diesel prices
 600 percent for electric utility coal prices
AAEA supports EPA's Endangerment Finding as a reasonable response to the U.S. Supreme Court ruling to examine the potential of greenhouse gases to harm human health. In the absence of Congressional legislation, AAEA also has no choice but to support the subsequent promulgation of regulations to mitigate damaging climate change.

Moreover, as the MIS report states, "No comprehensive analyses of the economic impacts of the EPA Finding have thus far been conducted," so we believe that until such a comprehensive analysis has been conducted, numerous confounding variables would appear to make it difficult to impossible to draw hard conclusions. Two of those variables of most concern to us are: 1) the impact of innovations that would result from monetizing carbon dioxide and other greenhouse gases, and 2) potential reduction in negative health impacts if governmental action by the U.S. motivates other nations to act.

Our concern is that EPA appears to be delaying regulations and backing away from an economy-wide regulatory framework. We are also concerned that EPA regulations should include provisions for 'anyone' to hold and trade allowances and offsets if they ultimately adopt a Cap-and-Trade regulatory framework.

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