Response to Questions about Estimating the Budgetary Impact of a Bill Similar to S.2877, the Carbon Limits and Energy for America's Renewal (CLEAR) Act
- Letter to the Honorable Maria Cantwell
This letter responds to your request for information about the methodology the Congressional Budget Office (CBO) would use to estimate the budgetary impact of a bill similar to S. 2877, the Carbon Limits and Energy for America’s Renewal (CLEAR) Act, which was introduced in the 111th Congress. In particular, you asked about how CBO would apply the "revenue offset" to the estimate of net revenues that would result from enacting the bill. Although CBO did not prepare a cost estimate for S. 2877, we can provide some general information about how the agency has projected the budgetary impact of similar legislation that would limit the emission of greenhouse gases through the issuance of tradable allowances or permits.