CBO report: Kerry's climate bill would cut deficit by $19b

By Matt Viser, Globe Staff

WASHINGTON – Senator John F. Kerry’s signature energy and climate change legislation would cut the deficit by $19 billion, according to a new estimate released today by the Congressional Budget Office.

The legislation has uncertain political prospects, but the estimate gives proponents another argument at a time when there are rising concerns about adding to the deficit.

“There is no more room for excuses – this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon,” Kerry said this afternoon in a statement with the legislation’s co-author, Senator Joseph Lieberman of Connecticut. “Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it.”

The CBO report estimates that the deficit would be reduced by $19 billion over the first 10 years, and that it would also not increase the deficit over the following 40 years.

The cost of the legislation, which includes various tax credits, would be more than offset by revenues collected through a cap-and-trade system, according to the report. The bill, which was released in May, would put a price on carbon emissions that opponents have attacked as a carbon tax that would hurt businesses.

The report estimates that an allowance, representing a metric ton of carbon dioxide, would cost about $14 in 2012, and would rise to $25 in 2020.

Matt Viser can be reached at maviser@globe.com.