EIA Analysis Shows EPA’s Carbon Regulations All Economic Pain for No Climate Gain

There is a new piece of analysis in the Reports section of our web page that examines the Energy Information Administration’s (EIA) recent assessment of the Environmental Protection Agency’s (EPA) Clean Power Plan.

We took a look at the economic losses EIA projects from implementing the Clean Power Plan and compared those against claimed climate benefits using the Obama Administration own Social Cost of Carbon estimates.  Those of you numerically inclined should check out the full report, but the upshot of our analysis is this:

Even when the administration’s exaggerated climate benefits are taken into account, using EIA model projection we calculate that the Clean Power plan will cost the economy anywhere from $899 billion to $1.16 trillion in net economic losses for the 2020 to 2030 compliance period set out by EPA (in 2014 dollars). This translates into an average net economic cost per ton of carbon dioxide reduced of $146 to $188, astonishingly high numbers.

EIA‘s projection leaves little room for doubt that EPA’s Clean Power Plan flops badly as a climate policy, even on the administration’s own terms and using the administration’s own methods and data.

Maybe creating a huge new bureaucracy to implement carbon dioxide regulations that would highjack well-established state authority, disrupt the entire U.S. electricity sector, jeopardize the reliability of the electric grid, raise electricity costs on struggling families, and yield an estimated net loss in wealth in the trillion-dollar range is appealing to EPA. But for the rest of the country, it’s a decidedly bad deal.