The Institute for Energy Research released a study last week done by Chamberlain Economics on the economic impact of the Kerry-Lieberman cap-and-trade bill. There’s a lot to digest, but here are some of their key findings:

  • The American Power Act would reduce U.S. employment by roughly 522,000 jobs in 2015, rising to over 5.1 million jobs by 2050.
  • Households would face a gross annual burden of $125.9 billion per year or $1,042 per household, with costs disproportionately borne by low-income households.
  • On a net basis, the top income quintile will benefit financially, redistributing to these households roughly $12.3 billion per year from the bottom 80 percent of earners.
  • Households over age 75 bear the largest burden at 2.3 percent of income, followed by households aged 65-74 and under age 25 at 2.1 percent. By contrast, the nation’s highest-earning households between age 45 and 54 years would bear the smallest percentage burden of just 1.5 percent.
  • Contrary to the legislation’s stated goal of reducing price volatility by excluding petroleum refiners from quarterly auctions, the Kerry-Lieberman bill is likely to significantly increase allowance price volatility from quarter to quarter, compared to an ordinary auction in which all covered industries bid for allowances.

Let’s not forget, last year the Congressional Budget Office also found the House-passed version of such a bill would slow economic growth – as did the Energy Information Administration. Even though the numbers vary between studies, the results are all the same: this type of legislation is bad news for the U.S. economy.

The climate bill under consideration in the Senate is very different from the one passed by the House last summer. Should the Senate bill pass (which is still extremely uncertain), the two versions will have to be merged in a conference committee. Rep. Henry Waxman (D-CA) has already indicated that he will push for greenhouse gas caps – one of the House bill’s more extreme provisions – to be included in any conference bill.

Just last month, the CBO said that it “analyzed the research on the effects that policies to reduce greenhouse gases would have on employment and concluded that total employment during the next few decades would be slightly lower than would be the case in the absence of such policies. In particular, job losses in the industries that shrink would lower employment more than job gains in other industries would increase employment, thereby raising the overall unemployment rate.”

Hopefully it won’t come to that – because with the economy struggling and employment numbers still dire, the last thing the economy needs is to shed even more jobs.