WASHINGTON (Reuters) - The climate change bill approved by the U.S. House of Representatives would reduce the gross domestic product of the United States by as much as 3.5 percent in 2050, the Congressional Budget Office estimates.
The Democratic-controlled House passed landmark legislation in June aimed at slashing industrial pollution that is blamed for global warming.
“Reducing the risk of climate change would come at some cost to the economy,” the CBO said in a reported posted on its website on Thursday.
The report concludes that if cap and trade provisions of the bill are implemented, the measure would reduce the gross domestic product by between 1 percent and 3.5 percent below what it otherwise would have been in 2050.
“By way of comparison, CBO projects the real inflation-adjusted GDP will be roughly two and a half times as large in 2050 as it today, so those changes would be comparatively modest,” the report said.
The House bill requires that large U.S. companies, including utilities, oil refiners, manufacturers and others, reduce emissions of carbon dioxide and other gases associated with global warming by 17 percent by 2020 and 83 percent by 2050, from 2005 levels.
A “cap and trade” program designed to achieve the emissions reductions by industry is at the core of the bill. Under the plan, the government would issue a declining number of pollution permits to companies, which could sell those permits to each other as needed.
Climate change legislation still must pass the Senate.
Republicans lawmakers have denounced the 1,500-page measure as a “job-killing bill” that would neither help the environment nor improve an economy reeling from a deep recession.
Writing by JoAnne Allen; Editing by Anthony Boadle