Brookings: Cap and Trade Will Cost Jobs and GDP

Conn Carroll / June 09, 2009

The Brookings Institution released their own analysis of analysis on the costs of cap and trade yesterday. Unlike Heritage’s recent Center for Data Analysis study, the Brookings effort does not analyze any particular bill, but does look at the economic costs of four policy scenarios. Their conclusions:

Welfare effects

• Loss in Personal Consumption of $1 to $2 trillion present value
• Incremental stringency produces high incremental cost, e.g. extra 8 % reduction increases costs 45%
• US GDP in 2050 lower by 2.5%

Employment effect

• -0.5% at peak in first decade

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