Opponents of climate legislation are living in a parallel universe where the value of pollution allowances disappears into a black hole, energy markets are currently perfect, and the impacts of global warming are costless. On this side of the worm hole in the real world, if we hold polluters accountable for their dangerous global warming pollution, consumers will see clean energy incentives and rebates, energy efficiency upgrades that will lower their energy bills, and benefits of acting to curb global warming that will far exceed the costs.

Despite being corrected on several occasions by the author, obstructionists are still clinging to the fraudulent claim that an MIT study shows climate legislation costing American households over $3,900 per year. The figure is obtained by adding together two numbers from an MIT study of a Senate bill, the Climate Security Act, done two years ago. The first figure is the average annual market value of carbon allowances per household ($3,128), and the second the amount of investment needed ($800 per household per year) to reduce emissions to required levels (e.g. money spent on renewable energy, and more efficient buildings and appliances). Asserting that climate legislation will cost households the sum of these two numbers, $3,928, is simply wrong. And the opposition knows it. Below I summarize the key points:

1) The market value of carbon allowances is not a cost. The $3,128 is the average annual value per household of the carbon pollution allowances, but that says nothing about who pays that $3,128 or who gets it. Any climate legislation passed by Congress is likely to reflect the proposal put forth by the U.S. Climate Action Partnership (USCAP), a consortium of major businesses and non-profit environmental organizations. Under the USCAP blueprint, regulated utilities will receive about half of the available allowances,[1] and they will be required to allocate all of them for public benefit purposes, on energy efficiency and rebates for their customers. Another portion of the $3,128 represents costs firms in trade-exposed energy intensive sectors can't pass on to consumers. This small sector of the economy (roughly 3% of gross domestic product in the U.S. and less than 6% of its direct emissions) will be compensated for these costs in exchange for improving energy efficiency in their firms and keeping jobs at home, ultimately increasing firms' productivity, competitiveness, and profits in the long run. Remaining funds will go toward some combination of clean energy development, forest preservation, adaptation, and direct consumer rebates. Thus, contrary to opposition claims that the $3,928 is a tax for a whole new wave of government expansion, virtually all of the carbon allowances will be used to help transition people to a low carbon economy, in the process creating new clean energy jobs, reducing the amount of energy we need to run our economy, and ending our expensive and dangerous dependence on foreign oil.

2) EPA's Analysis of the Waxman-Markey bill shows that it is very affordable. The $800 estimate of the annual cost of reducing emissions is not an analysis of the Waxman-Markey bill currently under consideration in Congress. Analysis of this bill by EPA finds a modest $98-$140 per household per year through 2050. This is a very reasonable amount, orders of magnitude smaller than other investments we make in our future, such as education, retirement, and life insurance. Moreover, at the same time, median household income is expected to increase by $1,208-1,993 per year[2] over the same period, twelve to fourteen times the $98-$140 investment cost.

3) MIT, EPA, and even opponents' studies all agree that climate legislation will not disrupt economic growth. The same MIT study projects an average annual increase in median household income of $3,188,[3] and GDP tripling in size by 2050, hardly a prescription of hardship and economic collapse, and much larger than the estimated cost of reducing emissions.

4) Energy experts recognize that we could reduce our energy use by 30% at no net cost. When we increase our efficiency, we save money on our energy bills, and create and support millions of jobs. Efficient appliances and buildings don't get built by themselves. Nor do wind farms and solar arrays.

5) Inaction is not a viable option. More important than any of the above, what the opposition is really saying is that it doesn't believe in science-which forecasts very high and potentially catastrophic climate destruction costs if nothing is done to reduce emissions. The opposition views reducing emissions as an optional investment in our future, one that wouldn't bring any critical benefits. In reality, protecting the planet is not a discretionary outlay-and it's a bargain at $98-$140 per year.

No matter how you slice it, making polluters responsible for their emissions has benefits that are likely to far exceed the costs. Claiming that pollution allowances worth $3,128 per household mysteriously vanish into a black hole is dishonest and a disservice to all Americans. We deserve to get out of this recession, and onto a clean energy growth path that will create millions of jobs, reduce our dangerous dependence on oil, and limit the most destructive effects of global warming. Let's get to work!

[1] In order to make up for lost tax revenues elsewhere and cost of living adjustments to social programs, the Treasury receives roughly 25% of any allowances it sells. Because it offsets a decline in government revenues elsewhere, it does not represent a new tax.

[2] Estimated by growing median household income by the growth rate in consumption.

[3] Estimated by growing median household income by the growth rate in consumption.