The Impact of Carbon Control on Low-Income Household Electricity and Gasoline Expenditures

Abstract

In July of 2007 The Department of Energy's (DOE's) Energy Information Administration (EIA) released its impact analysis of 'The Climate Stewardship And Innovation Act of 2007,' known as S.280. This legislation, cosponsored by Senators Joseph Lieberman and John McCain, was designed to significantly cut U.S. greenhouse gas emissions over time through a 'cap-and-trade' system, briefly described below, that would gradually but extensively reduce such emissions over many decades. S.280 is one of several proposals that have emerged in recent years to come to grips with the nation's role in causing human-induced global climate change. EIA produced an analysis of this proposal using the National Energy Modeling System (NEMS) to generate price projections for electricity and gasoline under the proposed cap-and-trade system. Oak Ridge National Laboratory integrated those price projections into a data base derived from the EIA Residential Energy Consumption Survey (RECS) for 2001 and the EIA public use files from the National Household Transportation Survey (NHTS) for 2001 to develop a preliminary assessment of impact of these types of policies on low-income consumers. ORNL will analyze the impacts of other specific proposals as EIA makes its projections for them available. The EIA price projections for electricity and gasoline under more » the S.280 climate change proposal, integrated with RECS and NHTS for 2001, help identify the potential effects on household electric bills and gasoline expenditures, which represent S.280's two largest direct impacts on low-income household budgets in the proposed legislation. The analysis may prove useful in understanding the needs and remedies for the distributive impacts of such policies and how these may vary based on patterns of location, housing and vehicle stock, and energy usage. « less