THE ECONOMIC IMPACT OF THE WAXMAN-MARKEY CAP-AND-TRADE BILL
June 30, 2009
The House of Representatives recently passed the Waxman-Markey cap-and-trade bill. However, it is clear that cap-and-trade is a very expensive method to combat "global warming" and amounts to nothing more than an energy tax in disguise, says Ben Lieberman, a senior policy analyst for energy and environment with the Heritage Foundation.
After all, when you sweep aside all the complexities of how cap and trade operates, the bottom line is that it raises the cost of energy high enough so that individuals and businesses are forced to use less of it. Inflicting economic pain is what this is all about. That is how the ever-tightening emissions targets will be met, explains Lieberman.
What are those costs?
- Contrary to the flawed analyses being advanced by the bill's proponents, Heritage estimates that the direct costs would be an average of $829 per year for a household of four, totaling $20,000 between 2012 and 2035.
- But when considering the total cost as reflected in the cost of allocations and offsets, the average cost to that family unit would be $2,979 annually from 2012 to 2035.
- Adding insult and hypocrisy to injury, the bill would hurt the poor the worst because they would bear a disproportionate burden of the higher energy costs the bill would trigger.
Now here's the kicker, says Lieberman:
- The bill is also projected to harm the manufacturing sector and cause estimated "net" job losses, averaging about 1.15 million between 2012 and 2030.
- The overall gross domestic product losses would average $393 billion per year from 2012 to 2035, and the cumulative loss in gross domestic product would be $9.4 trillion by 2035.
- The national debt for a family of four would increase by $115,000 by 2035.
Source: Ben Lieberman, "Testimony before the Senate Republican Conference: The Economic Impact of the Waxman-Markey Cap-and-Trade Bill," Heritage Foundation, June 26, 2009.
Browse more articles on Environment Issues