Passage of the Waxman-Markey cap and trade bill will create a self-imposed energy crisis that will have a devastating impact on families and businesses.
Even though cap and trade legislation was pushed heavily in the last Congress with the Lieberman-Warner Climate Security Act of 2008 few Americans grasp what cap and trade" really means much less how they will be affected.
According to a Rasmussen report released on May 11 2009 30 percent of Americans have no idea what cap and trade means; 29 percent think it has something to do with regulating Wall Street; and 17 percent think cap and trade is about healthcare reform.
Only 24 percent of the American public connect the term with the environment. In other words more than two-thirds of the public would be completely blindsided by the regulations and costs of the Waxman-Markey cap and trade bill.
Cap" refers to the limits the government will impose on the amount of carbon dioxide and other greenhouse gases that a company can release into the atmosphere. This cap would severely impact Alabama as over 76 percent of our energy comes from carbon-based fuel such as coal. (Fossil fuels such as coal natural gas and oil emit carbon dioxide when burned.)
The trade" part of the proposal references the mandates imposed by the federal government on businesses forcing them to buy or trade for permits based on the amount of carbon dioxide they emit over the government-mandated cap. Ultimately it is an elaborate tax scheme -- increased energy costs will be passed on to American consumers costing the economy millions of jobs and trillions of dollars.
The American Council for Capital Formation (ACCF) and the National Association of Manufacturers (NAM) issued a projection of the impact on Alabamas economy if the Lieberman-Warner bill which was more conservative than the Waxman-Markey bill had passed. According to their analysis Alabamas economy would have lost between 17000 and 25900 jobs by 2020 and between 44700 to 59500 jobs by 2030. And the bill would have drained about $2 billion from our economy by 2020 and up to $8 billion by 2030.
In terms of household income Lieberman-Warner would have reduced Alabama household disposable income by a minimum of $800 per year (up to $2600) by 2020 and $3400 (up to $6300) by the year 2030.
At the national level a new ACCF/NAM study of the Waxman-Markey bill reveals even worse news -- projected job losses of 1200000 to 1800000 by 2020 and as many as 4100000 by 2030 above and beyond the new green" jobs that will be created by the governments renewable energy initiative.
Those who think these projections are conservative scare tactics should take note of a study entitled Study of the Effects on Employment of Public Aid to Renewable Energy Sources" published by Spains Universidad Rey Juan Carlos. The study researched the impact on employment as a result of the Spanish governments efforts to create a green economy by subsidizing renewable energy.
According to that study Spains renewable energy initiative is actually causing job losses at the rate of 2.2 jobs lost for every new green" job created.
The study is highly relevant because Spain is often the country that President Obama cites as an example of the green jobs revolution." Based on the Universidad Rey Juan Carlos study the job drain in Spain is very plain: the Spanish governments attempt to create green" jobs has resulted in thousands of workers getting pink" slips.
Job losses are just part of the problem. The impact on household disposable income of Waxman-Markey bill is also extremely regressive.
A study published in March 2009 by the Tax Foundation projects the impact on household disposable income based on a cap and trade system designed to cut U.S. carbon emissions by 15 percent of the 2006 levels. The cost to households with annual income over $88774 is projected to be $2091 per year or 1.4 percent of their income. For households with incomes between $35095 and $56222 the annual cost will be $1100 per year or 2.4 percent of their income.
For households with annual income less than $18370 the annual cost is $612 per year or 6.2 percent of their income.
Those who claim a cap and trade scheme is a tax-free way to reduce greenhouse gases are either misinformed or deliberately being deceitful. Cap and trade is a tax of unprecedented size and scope that will fall most heavily on lower-income households in the form of higher energy costs and in the price of goods and services.
In other words if the Waxman-Markey bill passes the economic drain in jobs and income will not be limited to Spain.
Gary Palmer is president of the Alabama Policy Institute a non-partisan non-profit research and education organization dedicated to the preservation of free markets limited government and strong families which are indispensable to a prosperous society.
Passage of the Waxman-Markey cap and trade bill will create a self-imposed energy crisis that will have a devastating impact on families and businesses.
Even though cap and trade legislation was pushed heavily in the last Congress with the Lieberman-Warner Climate Security Act of 2008 few Americans grasp what cap and trade" really means much less how they will be affected.
According to a Rasmussen report released on May 11 2009 30 percent of Americans have no idea what cap and trade means; 29 percent think it has something to do with regulating Wall Street; and 17 percent think cap and trade is about healthcare reform.
Only 24 percent of the American public connect the term with the environment. In other words more than two-thirds of the public would be completely blindsided by the regulations and costs of the Waxman-Markey cap and trade bill.
Cap" refers to the limits the government will impose on the amount of carbon dioxide and other greenhouse gases that a company can release into the atmosphere. This cap would severely impact Alabama as over 76 percent of our energy comes from carbon-based fuel such as coal. (Fossil fuels such as coal natural gas and oil emit carbon dioxide when burned.)
The trade" part of the proposal references the mandates imposed by the federal government on businesses forcing them to buy or trade for permits based on the amount of carbon dioxide they emit over the government-mandated cap. Ultimately it is an elaborate tax scheme -- increased energy costs will be passed on to American consumers costing the economy millions of jobs and trillions of dollars.
The American Council for Capital Formation (ACCF) and the National Association of Manufacturers (NAM) issued a projection of the impact on Alabamas economy if the Lieberman-Warner bill which was more conservative than the Waxman-Markey bill had passed. According to their analysis Alabamas economy would have lost between 17000 and 25900 jobs by 2020 and between 44700 to 59500 jobs by 2030. And the bill would have drained about $2 billion from our economy by 2020 and up to $8 billion by 2030.
In terms of household income Lieberman-Warner would have reduced Alabama household disposable income by a minimum of $800 per year (up to $2600) by 2020 and $3400 (up to $6300) by the year 2030.
At the national level a new ACCF/NAM study of the Waxman-Markey bill reveals even worse news -- projected job losses of 1200000 to 1800000 by 2020 and as many as 4100000 by 2030 above and beyond the new green" jobs that will be created by the governments renewable energy initiative.
Those who think these projections are conservative scare tactics should take note of a study entitled Study of the Effects on Employment of Public Aid to Renewable Energy Sources" published by Spains Universidad Rey Juan Carlos. The study researched the impact on employment as a result of the Spanish governments efforts to create a green economy by subsidizing renewable energy.
According to that study Spains renewable energy initiative is actually causing job losses at the rate of 2.2 jobs lost for every new green" job created.
The study is highly relevant because Spain is often the country that President Obama cites as an example of the green jobs revolution." Based on the Universidad Rey Juan Carlos study the job drain in Spain is very plain: the Spanish governments attempt to create green" jobs has resulted in thousands of workers getting pink" slips.
Job losses are just part of the problem. The impact on household disposable income of Waxman-Markey bill is also extremely regressive.
A study published in March 2009 by the Tax Foundation projects the impact on household disposable income based on a cap and trade system designed to cut U.S. carbon emissions by 15 percent of the 2006 levels. The cost to households with annual income over $88774 is projected to be $2091 per year or 1.4 percent of their income. For households with incomes between $35095 and $56222 the annual cost will be $1100 per year or 2.4 percent of their income.
For households with annual income less than $18370 the annual cost is $612 per year or 6.2 percent of their income.
Those who claim a cap and trade scheme is a tax-free way to reduce greenhouse gases are either misinformed or deliberately being deceitful. Cap and trade is a tax of unprecedented size and scope that will fall most heavily on lower-income households in the form of higher energy costs and in the price of goods and services.
In other words if the Waxman-Markey bill passes the economic drain in jobs and income will not be limited to Spain.
Gary Palmer is president of the Alabama Policy Institute a non-partisan non-profit research and education organization dedicated to the preservation of free markets limited government and strong families which are indispensable to a prosperous society.
