EPA sees little economic impact from CO2 cuts

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By Chris Baltimore

WASHINGTON (Reuters) - A U.S. Senate proposal to cap and eventually reduce heat-trapping carbon dioxide emissions would stunt economic growth by no more than 1.6 percent by 2030, the U.S. Environmental Protection Agency found on Tuesday.

The EPA analysis counters claims from some who oppose mandatory caps on carbon dioxide emissions that the U.S. economy would take a sizable hit if the United States enacted legislation backed by Democratic leaders of both the Senate and House of Representatives.

Senators Joseph Lieberman, Connecticut Independent, and John McCain, Arizona Republican, asked the EPA in February to analyze their plan to cut U.S. carbon dioxide emissions by 65 percent below 1990 levels by 2050.

The EPA found that the Climate Stewardship and Innovation Act of 2007 would shave up to 1.6 percent, or $419 billion, off a baseline forecast for U.S. gross domestic product in 2030 and up to 3.2 percent, or $1.332 trillion, by 2050.

At a hearing before a subcommittee of the Senate Environment Committee on Tuesday, Lieberman noted that "nothing is free," but called the impact "manageable and affordable."

The full U.S. Senate could weigh climate change legislation for the first time this fall, Lieberman said.

The Senate Environment Committee must sort through at least five proposals to cut global warming.