A new report, conducted by researchers at Harvard University and RTI International, has indicated that the proposed legislation to reduce greenhouse gas emissions will not hinder America's future economic growth.
The report, conducted for the US Environmental Protection Agency, analyzed expected future economic adjustments associated with the proposed Low Carbon Economy Act of 2007, Senate Bill S.1766.
This bill, proposed by Senators Jeff Bingaman and Arlen Specter, would substantially reduce greenhouse gas emissions in the United States by placing a cap on emissions from most parts of the economy.
The bill includes both a trading system for emissions allowances and a technology accelerator payment system (TAP) in order to encourage cost-effective reductions and reduce any future uncertainties faced by businesses and households.
"According to our analysis using the RTI ADAGE model, the S.1766 bill would achieve emissions reductions with only a slight impact on economic growth," said Martin Ross, an energy and environmental economist at RTI.
Instead of affecting the US economic growth, the RTI analysis shows that enacting this new legislation would result in forecasted growth for U.S. Gross Domestic Product over the next 40 years of 2.69 percent annually, compared with 2.72 percent without the bill.
Similar changes are estimated for growth in household consumption, and energy prices are expected to be modestly affected.
Technological advancements such as carbon capture and storage from electricity generation are an important component of meeting the targets in the bill.
According to Ross, issues affecting the necessary economic adjustments include things such as the availability of these new technologies and the extent of international actions to reduce greenhouse gases in both developed and developing countries.
"As written, the bill encourages development of advanced technologies to lower emissions. It is also important to note that the analysis focuses on costs of reducing emissions and does not consider economic benefits associated with preventing changes in climate," he added.