Barack Obama sold the Democratic cap-and-trade bill as a job-creation bill, but a new study by Heritage tells a much different story. Rather than an effective means of boosting the American economy through the creation of a “green energy” industry, the plan will damage manufacturing, service, and agricultural sectors of the economy through massive cost burdens across all industries, as well as hike costs on American families for energy consumption. In every year between now and 2035, America will lose jobs because of Waxman-Markey:
Implementing the Waxman-Markey legislation will be very costly, even given the rather optimistic assumptions about how effective it will be in reducing CO2 emissions and how accommodating the economy will be to the added energy costs. The Heritage Foundation’s dynamic analysis of these economic costs are summarized as follows (adjusted for inflation to 2009 dollars):
- Cumulative gross domestic product (GDP) losses are $9.4 trillion between 2012 and 2035;
- Single-year GDP losses reach $400 billion by 2025 and will ultimately exceed $700 billion;
- Net job losses approach 1.9 million in 2012 and could approach 2.5 million by 2035. Manufacturing loses 1.4 million jobs in 2035;
- The annual cost of emissions permits to energy users will be at least $100 billion by 2012 and could exceed $390 billion by 2035;
- A typical family of four will pay, on average, an additional $829 each year for energy-based utility costs; and
- Gasoline prices will rise by 58 percent ($1.38 more per gallon) and average household electric rates will increase by 90 percent.
This CDA analysis extends only to 2035, as this is the forecasting horizon for the macroeconomic model used to prepare these estimates. But it should be noted that the emissions reductions continue to tighten through 2050 and that model-based analysis by other groups whose models extend beyond 2035 shows increasing harm to the U.S. economy.
In addition to burdening households, the high energy prices weaken the production side of the economy. Contrary to the claims of an economic boost from “green” investment as firms undertake the changes to reduce emissions and increased employment as so-called green jobs are created to do this work, Waxman-Markey would be a significant net drain on GDP and employment.
In case you miss the point, Heritage has included this handy chart:
By the way, those are not cumulative job losses represented in this graph. Those are job losses per year.
What about energy prices? The first few years would show only a small growth in costs to consumers, as the producers work through the freebie emissions grants with which Congress sweetened Waxman-Markey. After that — look out:
And how much would all of this damage to the American economy help cool the planet? You’d need a precision thermometer to see it:
Climatologists estimate that Waxman-Markey’s impact on world temperature will be too small to even measure in the first several decades. The theoretical moderation of world temperature would be 0.05 degree centigrade by 2050. If CO2-emission levels meet the Waxman-Markey target of 17 percent of 2005 emissions by the year 2050, and if they are frozen at that level for the rest of the century, Waxman-Markey would still reduce the world temperature by only 0.2 degree Celsius by 2100.
Be sure to read it all, and keep those charts handy. While we’re demanding answers from our elected representatives on ObamaCare this month, we should be showing these charts and figures and ask them why the hell they voted Waxman-Markey out of the House with almost no debate at all.