The Heritage Foundation recently hosted an event on the economic impacts of cap and trade. Multiple organizations have modeled the effects of cap and trade and found varied results but none of them provided the news you’d want to hear, especially in a recession. Despite repeated attempts to sell cap and trade as a jobs bill, not one scenario of even one presenter (including the three government agencies) projected a net increase in income or employment from cap and trade. The entire debate was over the magnitude of income, consumption and job losses.
Speakers included representatives from the National Black Chamber of Commerce, The Brookings Institution, the Energy Information Administration, the Congressional Budget Office, the Environmental Protection Agency, and The Heritage Foundation. The Congressional Research Service’s recently analyzed seven studies on the projected cost (including the National Association for Manufacturers’ study and the Massachusetts Institute for Technology’s study). None of the studies projected jobs or income growth from cap and trade. While these studies differed, they only differed on the magnitude of negative impacts. There was no disagreement on the sign. That is, cap and trade will lead to fewer jobs and lower income.
The disparity in the cost estimates was largely a result of differing assumptions on the use of offsets as well as the commercialization of carbon capture and sequestration and increases in the amount of nuclear energy. But two things are clear: This is not a jobs bill. This is not an economic stimulus.
Regardless of the cost estimates and regardless of whether global warming is a significant problem, the studies all agree that cap and trade will not stimulate the economy. So maybe the trade off is lost jobs and lost income for a cooler planet?
Climatologist Chip Knappenberger projected that the Waxman-Markey cap-and-trade legislation would moderate temperatures by only five hundredths of a degree in 2050 and no more than two-tenths of a degree Celsius at the end of the century.
More on the costs of cap and trade can be found here. You can watch yesterday’s event, and find the presentations of the presenters, here.