Despite President Obama’s prediction that it will create new jobs, the global warming bill passed by the House of Representatives will mean fewer jobs by 2030 than if Congress did not act at all, according to the first comprehensive study of the measure by the federal government.
The Energy Information Administration report, requested by the two Democrats who wrote the House bill, says the short-term economic consequences are small, but “after 2025, the rapid increase in energy prices causes the economy to contract” as more rigid requirements kick in.
The House passed its bill June 26 on a 219-212 vote, and a week later Mr. Obama said the legislation “holds the promise of millions of new jobs — jobs, by the way, that can’t be outsourced.”
The Senate still is drafting its version of the climate bill.
But the EIA report, in a chart examining employment, reports that if the bill were implemented, employment actually would be a quarter of a percent lower in 2030 than would otherwise be the case, with the manufacturing sector suffering a 2.5 percent drop in jobs.
The House bill imposes a limit on overall U.S. greenhouse gas emissions and tightens that cap as time goes on, requiring polluters to either reduce their emissions or offset their pollution by paying others to reduce their emissions. The system is known as “cap-and-trade.”
The study by the EIA, an Energy Department agency that is the government’s official analyst for energy issues, does not say how effective the bill would be in reducing global temperatures or in lessening U.S. reliance on foreign sources of energy — two other primary goals its Democratic sponsors have laid out.
The Democratic authors of the global warming bill — Rep. Henry A. Waxman of California, chairman of the House Energy and Commerce Committee, and Rep. Edward J. Markey of Massachusetts, a subcommittee chairman — requested the EIA study to look at the consequences of their bill. EIA says the bill will hurt the economy.
The climate measure “increases the cost of using energy, which reduces real economic output, reduces purchasing power and lowers aggregate demand for goods and services. The result is that projected real gross domestic product (GDP) generally falls relative to the reference case,” according to the EIA study.
Mr. Waxman and Mr. Markey insisted that the report shows their bill is an affordable way to cut greenhouse gases. One section of the EIA analysis forecast there would be only minimal impact on energy prices by the carbon cap plan, at least in the first decade after cap-and-trade is implemented.
“The evidence is now overwhelming that this clean-energy legislation is both affordable and effective. American clean energy will grow substantially, and so will clean-energy jobs that can’t be shipped overseas,” they said.
EIA analysts said there is a lot of uncertainty about how the program will play out, and looked at six different possible scenarios for how quickly technological advances will bring reductions in greenhouse gas levels and how easily U.S. companies will be able to pay those overseas to offset U.S. emissions.
According to the worst-case scenario — if technology doesn’t materialize and other countries refuse to cooperate on offsets — consumer prices could be 14 percent higher in 2030 than they would otherwise be without the global warming bill.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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