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Climate Change Legislation: Myths and Reality

Here are some quick "reality checks" on common misconceptions about climate change legislation in the United States.

Cap & Trade

Myth: Cap-and-trade will cost jobs

Myth: Cap-and-trade will make the U.S. less competitive with other countries

Opponents of climate legislation argue that putting a price on carbon in the United States will affect some industries’ competitiveness and drive jobs overseas. In particular, there is concern that China will take jobs from the United States

  • Reality: China is examining and planning its transformation to a clean energy economy. Beijing is investing 10 times as much on clean power, as a percentage of gross domestic product, than the United States. According to several leading U.S. businesses, the real competitiveness issue is who will win the race to supply technology to tomorrow’s global clean energy markets. Without strong climate change legislation here in the United States, China will have a clear advantage by virtue of its ambitious clean energy policies. Already, four of the top five wind technology manufacturers and nine of the top ten of the largest solar panel producers is headquartered overseas.

Myth: Cap-and-trade programs don’t work

Opponents claim that problems encountered early on by the European Union Emissions Trading Scheme indicate that cap-and-trade won’t work.

  • Reality: The United States has successfully operated cap-and-trade systems. The Federal Acid Rain Program employed a sulfur emissions cap–and-trade system that produced a 50 percent cut in emissions, at much lower cost and greater efficiency than predicted.
  • Reality: The first phase of the EU trading system did not have enough data to determine how many permits to issue or where to set the cap. As a result, it was over-supplied with permits (allowances) for the level of emissions. Current and future phases of the program include design changes to correct for lessons learned during the initial phase.
  • Reality: The West, Midwest and Northeast United States, covering more than 20 states and half of the U.S. population, are already discussing regional climate cap-and-trade programs. The Northeast Regional Greenhouse Gas Initiative, established a trading system that has been up and running since January 1, 2009.

The American Clean Energy and Security Act (ACESA)

Myth: ACESA will send your energy bills through the roof
  • Reality: The overall net impact on the average household---including the benefit of many of the energy efficiency provisions in the legislation---in 2020 would be 23-48 cents per day ($84-$175 per year), according to estimates by the U.S. EPA, DOE (EIA Basic case) and Congressional Budget Office.
  • Reality: ACESA has designed safeguards to help protect low income households. Over 50 percent of the value of allowances between 2012 and 2025 would be channeled into programs to assist income energy consumers through tax assistance for low-income citizens and natural gas, heating oil and electricity cost relief. In addition, state governments and businesses will receive millions of allowances to cushion the transition to a clean energy economy, which will benefit their citizens and preserve jobs.

Myth: 85 percent of the allowances allocated will be given away to fossil fuel intensive industries
  • Reality: According to a WRI analysis on the distribution of emission allowances to aid industries and consumers affected by the transition to a clean energy, low carbon economy, 76 percent of the allowances are directed to consumer assistance and other public benefits between 2012 and 2025. The remainder is given to industry for free or after meeting certain technology deployment requirements.

Climate Change

Anthropogenic climate change doesn’t exist
  • Reality: The IPCC's Fourth Assessment Report released in 2007---reviewed by thousands of climate science experts---confirms beyond any reasonable doubt that climate change is occurring, and to a significant degree is human-induced.
  • Reality: Climate Science: Major New Discoveries---a WRI compilation of scientific developments since the release of the Fourth Assessment Report in 2007---concludes that climate change impacts are already happening, and at a faster rate than previously projected. For example:
    • Melting rates for 30 mountain glaciers doubled between 2004 and 2006
    • More than 28,000 plant and animal species are changing habits due to new climatic conditions
    • From 1996 to 2006, the rate of Antarctic ice mass loss increased by 75 percent

Renewable Energy and Energy Efficiency in the Southeastern United States

Myth: Southeastern states don’t have enough renewable resources to meet clean energy and efficiency mandates
  • Reality: Findings from WRI’s research suggest that more than 25 percent of the Southeast U.S. region’s electric power could come from locally-available renewable energy supplies by 2025. Energy efficiency improvements could reduce electricity use more than 10 percent in the Southeast in the next six years - saving the same amount of power generated by more than 30 coal-fired power plants.

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