The nonpartisan Congressional Budget Office (CBO) recently released an eight-page analysis on the effects of a CO2 cap-and-trade system on the economy. The study found that electricity, gas and travel would all cost more, the U.S. would have job losses and the poor would suffer the most if such a system to control carbon dioxide emissions were implemented. If a 15 percent reduction in CO2 emissions were required, most sectors of the U.S. economy would lose jobs. High carbon emitting companies would have the hardest time, especially the coal industry. Depending on how legislators draft a bill, they could "mitigate consumer pain," according to the CBO. For example, the study found that if an "auction" system of allocating emissions credits were instituted, consumers would feel less economic pain.
Lawmakers had mixed reactions to the report. Sen. James Inhofe (R-OK) said that the report confirmed his belief that a cap-and-trade system would hurt the U.S. economy and do little to reduce emissions. Democratic spokespeople for the Senate Environment and Public Works Committee declined to comment.