The Congressional Budget Office says the net annual economy-wide cost of the cap-and-trade program in the House Energy & Commerce Committee’s climate-change bill in 2020 would be $22 billion — or about $175 per household. The figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it doesn’t include the economic benefits and other benefits of the reduction in greenhouse gas emissions and the associated slowing of climate change. Of the total cost, CBO could not determine the incidence of certain pieces (including both costs and benefits) that represent, on net, about 8% of the total.

For the remaining portion of the net cost, households in the lowest income quintile would see an average net *benefit* of about $40 in 2020, while households in the highest income quintile would see a net *cost* of $245. Added costs for households in the second lowest quintile would be about $40 that year; in the middle quintile, about $235; and in the fourth quintile, about $340. Overall net costs would average 0.2% of households’ after-tax income.

“Reducing emissions to the level required by the cap would be accomplished mainly by stemming demand for carbon-based energy by increasing its price,” CBO Director Douglas Elmendorf says in a post on his blog Saturday. “Those higher prices would, in turn, reduce households’ purchasing power. At the same time, the distribution of emission allowances would improve households’ financial situation. The net financial impact of the program on households in different income brackets would depend in large part on how many allowances were sold (versus given away), how the free allowances were allocated, and how any proceeds from selling allowances were used. That net impact would reflect both the added costs that households experienced because of higher prices and the share of the allowance value that they received in the form of benefit payments, rebates, tax decreases or credits, wages, and returns on their investments.”

The CBO analysis focuses on 2020 because at that point the cap on carbon emissions would have been in effect for eight years (giving the economy time to adjust) and at which the allocation of allowances would be representative of the situation prior to the phase-down of free allowances.