Responses to Questions About the Cost of a Cap-and-Trade Program, June 12, 2009
"I am writing in response to your questions about an analysis by the Congressional Budget Office (CBO) that I discussed in my May 7 testimony before the Senate Finance Committee.

That testimony addressed the impacts of a possible cap-and-trade program for reducing U.S. emissions of carbon dioxide (CO2). In that testimony, I indicated that the price increases associated with an illustrative cap-and-trade program that CBO considered would result in an average cost per household of $1,600 a year. That figure is an estimate of the gross perhousehold cost due to the imposition of a price on emissions; the net per-household cost, which accounts for other features of the program that would reduce households’ costs or raise their income, would be substantially lower. In addition, the $1,600 cost estimate derives from the
particular cap-and-trade program that CBO examined. The cost of cap-and-trade programs that have significantly different design features, such as the one that would be established under the bill recently approved by the House Energy and Commerce Committee (H.R. 2454, the American Clean Energy and Security Act of 2009), could be significantly different..."