2:00 p.m. EST
Frank Conte, Communications|
scheme will cost California jobs
forecast is 'flawed' say authors of new report
MA- Specific proposals that several Western states, including California,
would implement to comply with a proposed cap-and-trade carbon emissions
control pact would destroy jobs and erode income,
according to a report co-released by an economics institute.
In a thorough
review of the claims made by the Western Climate Initiative, the Beacon
Hill Institute at Suffolk University in Boston identified several flaws
made by the seven-state consortium, calling into question so-called
cost savings ranging between $11.4 billion and $23.5 billion. These
flaws render WCIs projections useless in determining the initiatives
cost to state economies.
of the report write, Using the Western Climate Initiatives
own projections of increases in fuel costs, BHI finds that the policies
will decrease employment, investment, personal income and disposable
WCI claims the design is also intended to mitigate economic impacts,
including impacts on consumers, income, and employment, they fail
to quantify the impacts."
states are full participants in WCI: Arizona, California, Montana, New
Mexico, Oregon, Utah, and Washington. Beacon Hill found that none of
the seven WCI states would escape economic harm should cap-and-trade
be imposed. California could lose as many as 78,694 jobs and see a $30.4
billion reduction in personal income by the year 2020.
Hill Institute found that WCIs policy recommendations would
have substantial negative effects on the economies of its member
a scenario in which 100 percent of greenhouse gas emission permits would
be auctioned off to emitters in a cap-and-trade scheme, BHI determined
that the seven states:
Would lose from 103,931 to 251,674 private sector jobs, while the
permit revenue would allow the states to hire 57,269 to 142,241 state
Would put investment by firms at serious risk by slowing investment
in the region by $548 million to $1,448 million;
Would diminish total personal income, which would fall by $6.35 billion
to $18.31 billion per year.
negative economic effects stem from the price and tax increases the
states would impose on the energy and transportation sectors. Because
a cap on carbon emissions is effectively a tax on energy production
that is passed to industry, businesses and consumers, the effect is
likely to drive commerce and jobs to other states or countries.
cap-and-trade program would increase input costs for producers located
within WCI states, placing them at a competitive disadvantage to those
outside the areas, BHI noted. The pressure would be especially
acute for producers that utilize large amounts of energy in the production.
4/2/09 11:42 AM