A new study out last week looks at the economic impact of the America’s Climate Security Act of 2007 (S. 2191). The bill would create an emissions cap designed to dramatically reduce the amount of CO2 that the United States emits (it aims to reduce U.S. greenhouse gas emissions 63 percent by 2050). The bill would create new fuel standards and is basically the “cap and trade” plan (it caps emissions and allows entities to trade the right to pollute). Unfortunately, the study found that the bill would have tremendous costs to our economy, including:
- Gross Domestic Product would be reduced by $151 billion to $210 billion by 2020 and between $631 billion to $669 billion per year in 2030.
- Americans would lose 1.2 million to 1.8 million jobs in 2020 and 3 million to 4 million jobs in 2030.
- Household income would be reduced by $739 to $2,927 per year in 2020 and $4,022 to $6,752 per year in 2030.
- Electricity prices would increase by 28% to 33% by 2020 and 101% to 129% by 2030, and gasoline prices would increase 20% to 69% by 2020 and 77% to 145% by 2030.
In short, the costs are severe, as explained by IWF’s Carrie Lukas in a press release:
“This legislation, if passed into law, would cost the United States trillions of dollars in the coming decades and lead to the loss of millions of jobs,” said Carrie Lukas, vice president for policy and economics at the Independent Women’s Forum. “The average American family will see their income go down by thousands of dollars and their energy costs soar. Simply put this policy would be bad news for American families.”
And the benefits to the environment are minimal:
“The saddest aspect of this legislation is that, if the global warming theory and current predictions are correct, than this won’t make any meaningful difference in future temperature increases. The economic slowdown will leave us with fewer resources to invest in improving the environment or combating other challenges that may lie ahead,” said Lukas. “Policymakers should not lose site of the unintended consequences of policies such as this and focus on ways to improve our environment without sacrificing our economy.”