Inhofe EPW Rapid Response
Cap-and-Trade Destroys Jobs
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Promise: "But the bulk of our efforts must focus on unleashing a new, clean-energy economy that will … cut our carbon pollution by about 80 percent by 2050, and create millions of new jobs right here in America[.]" —President Barack Obama, April 22, 2009 (speech in Newton, Iowa)
Reality: Cap-and-trade will destroy millions of jobs overall, even if it does create some green jobs. Numerous studies have analyzed the effect of cap-and-trade legislation and concluded that it would result in millions of fewer jobs overall, even if it does create some green jobs. The Energy Information Administration (EIA), the government agency in charge of providing official energy statistics, concluded that cap-and-trade could result in up to 2.3 million fewer jobs in 2030 and up to 800,000 fewer manufacturing jobs in 2030, after including new green jobs.[ii]
The National Black Chamber of Commerce (NBCC) commissioned a study by Charles River Associates (CRA) that concluded cap-and-trade would result in about 1.5 million fewer jobs in 2015 and 3.6 million fewer jobs in 2050, after new green jobs were considered[iii] (graph below[iv]).
The National Association of Manufacturers (NAM) commissioned a study by Science Applications International Corporation that concluded cap-and-trade would result in up to 2.44 million fewer jobs overall in 2030 and up to 740,000 fewer manufacturing jobs in 2030, including new green jobs.[v]
|Study||Year||Fewer Jobs||Fewer Mfg Jobs|
|Heritage||2035||2.5 mil.||1.4 mil.|
|* denotes "up to" because multiple scenarios were run.** "within the first decade."|
Think tanks such as the Heritage Foundation[vi] and the Brookings Institution[vii] also predict jobs will be lost overall under a cap-and-trade regime, after considering new green jobs. The Congressional Budget Office (CBO) and the Environmental Protection Agency (EPA) did not model employment effects in their analyses of cap-and-trade.
The recently introduced Kerry-Boxer bill[viii] seems to recognize that workers will lose their jobs as a result of the bill because it provides, as the House-passed Waxman-Markey bill does, for assistance to displaced workers.[ix]
Bottom Line: Cap-and-trade kills millions of more jobs than it creates.
All the studies focused on H.R. 2454, "The American Clean Energy & Security Act," that passed the House of Representatives, except Brookings’ which looked at a more generic cap-and-trade system. Senators Kerry and Boxer have introduced S. 1733 "The Clean Energy Jobs and American Power Act," in the Environment and Public Works Committee. The bill lacks many details but Senator Boxer’s staff has indicated that the bill’s details will be modeled after the House bill.
[ii] "Energy Market and Economic Impacts of H.R. 2454, the American Clean Energy and Security Act of 2009, " August 2009. Available here: eia.doe.gov. These figures are compiled from data spreadsheets, available here: eia.doe.gov (reference) and here: eia.doe.gov (No International Offsets / Limited Technology)
[iii] "Impact on the Economy of the American Clean Energy and Security Act of 2009 (H.R. 2454)," August 2009. Available here: nationalbcc.org.
[iv] Id. at p. 17.
[v] "Analysis of The Waxman-Markey Bill," Summer 2009, p. 5. Available here: accf.org.
[vi] "The Economic Consequences of Waxman-Markey: An Analysis of the American Clean Energy and Security Act of 2009," August 6, 2009. Available here: heritage.org.
[vii] "Consequences of Cap and Trade," June 8, 2009. Available here: brookings.edu .
[viii] S. 1733, The Clean Energy Jobs and American Power Act. The bill still contains many blanks at this stage.
[ix] See S. 1733, Secs. 311-313.