A recent Gallup Poll showed that Americans prefer 75% to 10% not to enter into an emission-reduction scheme that doesn't include nations like China and Brazil. That should be important news for the president, whose preferred domestic policy solution of a 17% reduction in U.S. greenhouse gas emissions from 2005 levels by 2020 would be implemented without the guarantee of similar action by other nations. "Cap and trade" is a scheme by which the government sets a steadily declining limit on U.S. greenhouse gas emissions and then requires companies to purchase permits for each ton of carbon they emit. The very nature of this plan makes energy more expensive for everyone in the economy, including manufacturers and consumers. According to recently published economic research from the American Council for Capital Formation and National Association of Manufacturers, the burden of the House of Representatives' Waxman-Markey bill (passed in the House in June of this year) will fall heavily on Midwest states dependent on coal and natural gas electric generation capacity. According to the study, the nation's manufacturing sectors will suffer economic output losses of approximately 6% by 2030. Meanwhile, while gas prices would increase by as much as 26%, electricity prices would go up by as much as 50% and natural gas would increase by as much as 73%. These continued losses in output and rises in energy prices will have a serious, lasting, negative effect on the state's economic base. Lower industrial output due to higher energy prices, the high cost of complying with required emissions cuts and greater competition from overseas manufacturers with lower energy costs all add up to making it more difficult to stay in business, grow and keep people employed. These are not abstract figures; they have a direct impact on the home life of each resident. In a cap-and-trade world, Americans would see disposable household income reduced by as much as $1,248 by 2030. Of course, many families will be lucky to still have jobs. In 2030, as emission-reduction targets and other Waxman-Markey provisions phase out, there are 1.8 million fewer jobs in the U.S. under the low-cost scenario and 2.4 million fewer under the high-cost case. This troubling combination of high energy prices, fewer jobs and loss of industrial output are estimated to reduce gross domestic product by a truly staggering $3.1 trillion over the 2012-30 period. That's "trillion" with a capital T and expensive with a capital E. Original Article |
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