NCPA - National Center for Policy Analysis

Cap-and-Trade Programs Reduced Hiring, Earnings

January 12, 2015

Cap-and-trade programs place a ceiling on certain types of emissions -- companies are given a right to emit pollutants to a certain limit, and they can sell that right to others. For example, if a company cannot meet its emission targets, it can purchase emissions permits from companies who are under their emissions limit.  But what do these programs mean for employment in those industries?

Jason Russell of the Washington Examiner cites a recent study published by the Bureau of Economic Research, which analyzed 20 states across the eastern part of the country which were part of a 2003 EPA cap-and-trade program. Russell reports:

  • Manufacturing jobs fell by 1.3 percent, resulting in a total loss of 110,000 jobs.
  • Manufacturers that used high amounts of energy cut jobs by 3.9 percent more than low energy-users.
    • Young workers were hurt the most by the job cuts, and new hires faced a drop in earnings.

The study found that cap-and-trade's biggest impact was on two groups: new workers (who earned less) and workers who were never hired as a result of the regulations.

Source: Jason Russell, Study: Cap-and-trade kills jobs, Washington Examiner, January 5, 2015.


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