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Podcast: Low-Income Consumers and the Kerry-Boxer Climate Bill

In this podcast we’ll discuss recent developments in climate change legislation. I’m Janet Hodur, and today we’re joined by the Center’s chief economist Chad Stone.

1. Chad, the House passed climate legislation in June, and now Senators John Kerry and Barbara Boxer have co-authored a bill that sets the stage for Senate deliberations. Can you tell me a little bit about their bill?

A: The Kerry-Boxer bill, a.k.a. the “Clean Energy Jobs and American Power Act,” is broadly similar to the House bill but as you said it only sets the stage. Many key provisions have not been fleshed out. The House took strong action to protect low-income consumers from the increased energy costs that are part and parcel of effective policies to fight global warming, and the Kerry-Boxer bill affirms the principle that such protection is a top priority. But so far there are no specifics on how they will do that.

2. Why is it necessary to protect low and moderate income families from these increases in energy costs?

A: The economic costs of reducing greenhouse gas pollution are relatively modest and manageable. But, policies that charge those who emit greenhouse gases will raise energy prices. Low- and moderate-income households are disproportionately affected by those increases because they spend a higher proportion of their budget on energy and energy-intensive products than higher income households do. Spending several hundred dollars more each year to heat their homes, feed their children, and travel to and from work could cause real hardship for these families.

3. You said the House bill provided good protection for low-income households. As Senator Boxer and the Environment and Public Works Committee get ready to fill in the blanks in Kerry-Boxer, what should they be doing to build on what the House did?

A: The Senate should back up the Kerry-Boxer commitment to making sure that the average low-income family is NOT made worse off by climate change legislation. Senator Boxer’s Environment and Public Works Committee should latch onto the House low-income provisions and build from that foundation. They should dedicate at least 15 percent of the emissions allowance value to the program. They probably will not specify the details of how the program would work, however, as that responsibility will ultimately fall to the Finance Committee.

4. What kind of timeline are we looking at for all of this?

A: The short answer is we simply don’t know. As I mentioned, there are a lot of things to still be worked out, and a lot of outside factors will affect the timing. In addition to Environment and Public Works, several other committees in the Senate have jurisdiction over pieces of this bill. I’ll actually be testifying before the Energy and Natural Resources Committee, Wednesday, October 21st. Looking past that hearing and others there’s the international climate negotiations scheduled for early December in Copenhagen, which will also play into this. But we continue to watch the discussion move forward, and we’ll be paying attention to each step as it comes.

Thanks for joining me, Chad.