Tag: carbon tax

CBO Releases Carbon Tax Report

This week the Congressional Budget Office (CBO) released a report, Effects of a Carbon Tax on the Economy and the Environment, which explores the economic and environmental impacts of a carbon tax.

The NAM recently released an economic study conducted by nonpartisan NERA Economic Consulting, looking at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. Our study, which was actually cited in the CBO report, found that any revenue raised by the carbon tax would be far outweighed by the negative impacts to the overall economy – even if all of the revenue was used for either reducing the federal deficit or decreasing marginal tax rates (the two less bad options according to CBO). In fact, our study showed the higher the carbon tax the more severe the impacts to the economy.

A carbon tax designed to reduce CO2 levels by 80 percent could place tens of millions of jobs at risk and raise gasoline prices by over $10 per gallon, residential electricity prices by over 40 percent, and natural gas prices by almost 600 percent. Manufacturing output could drop by as much as 15.0 percent in energy-intensive sectors and 7.7 percent in non-energy-intensive sectors. The overall impact on jobs could be substantial, with a loss of worker income equivalent to as many as 1.5 million jobs in 2013 and 21 million by 2053. (continue reading…)

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Setting the Record Straight on a Carbon Tax

This morning, the Washington Post editorial board again called for a carbon tax with the piece “Carbon tax is the best option Congress has.”  It’s the second time in the last two months (and fourth in the past six months) the Post has called for this tax, which has the potential to hurt jobs and our economy. It’s a surprising amount of attention for a concept that has little to no political legs in Congress.

Congress isn’t talking about a carbon tax because when a cap-and-trade bill like Waxman-Markey is labeled a “job-killing energy tax” and can’t win support in the Senate, it’s hard to get behind a bill that would impose an actual energy tax.

Also, a carbon tax does not appear to be the economic or environmental panacea the Post is making it out to be.  A recent economic study for the NAM conducted by the nonpartisan NERA Economic Consulting looked at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. In both cases, any revenue raised by the carbon tax would be far outweighed by the negative impact to the overall economy.

Both cases would hurt families and businesses, resulting in higher prices for natural gas, electricity, gasoline and other energy commodities.  The $20/ton case reduces U.S. CO2 emissions by only about 30 percent, a much smaller amount than was called for in Waxman-Markey and by leading climate advocates.  To get to the levels they are seeking, 80 percent reductions by 2050, the economic costs skyrocket. (continue reading…)

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A Carbon Tax Could Have A Costly Impact On Our Economy

In yesterday’s Wall Street Journal Georg P. Schultz and Gary S. Becker wrote about their support for a carbon tax. They state that a carbon tax would put all Americans on a level playing field.

Back in February the National Association of Manufacturers released the results of an extensive study conducted by the non-partisan NERA Economic Consulting. The study looks at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. Both cases would have a negative impact on the economy.

Energy costs for families would increase as would the costs to use natural gas. Most states would see an increase in gas prices of 20 cents a gallon. During a time when families and small businesses are still struggling this would be an added cost they just can’t afford.

Today the NFIB released the results of their small business sentiment survey which showed small business confidence still down. Business owners are anxious about the economy and soft growth in sales.

Manufacturers are looking to Washington for pro-growth policies which will allow manufacturers to grow and take full advantage of our nation’s energy resources. And a carbon tax could potential have costly consequences for our economy.

 

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The Wall Street Journal Weighs in on a Carbon Tax

Last Thursday the Wall Street Journal editorial board ran a piece about the debate over a carbon tax during the Senate’s Vote-A-Rama on the budget resolution. Sen. Roy Blunt offered an amendment which received a majority of votes but not enough to pass at 53-46 that would require 60 Senate votes to impose a harmful carbon tax. Sen. Blunt’s amendment has bipartisan support with eight Democrats joining all the Republicans to support the amendment.

Remember that late in February the NAM released the results of a study by the nonpartisan NERA Economic Consulting that looked at the economic consequences of a carbon tax. The study found that the cost of energy such as natural gas would increase and manufacturing output would take a serious blow. Workers incomes would also decline as a result of a carbon tax by as much as 8.5 percent.

Jobs would be impacted throughout the economy and country, with a loss of worker income equivalent to between 1.3 million and 1.5 million jobs in 2013 and between 3.8 million and 21 million by 2053.

When considering a carbon tax it is essential that Congress take into the account the serious economic consequences and damage to our economy and jobs that such a tax could cause. Please check out this blog post last week from the NAM’s Ross Eisenberg that further explains these carbon tax votes from the Senate Vote-A-Rama.

 

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Manufacturers Keep a Close Eye on Energy Amendments in Senate Budget

Today the Senate is holding votes on a series of amendments to the chamber’s first budget in four years. Several of the amendments on the floor address energy issues. Manufacturers use one-third of the energy consumed in the United States which makes access to affordable energy essential. Regulations and other policies which drive up costs are extremely concerning for manufacturers.

Senator Roy Blunt has filed an amendment that opposes a carbon tax. Last month the NAM released a study by NERA economic consulting that showed a carbon tax could have a devastating impact on our economy and jobs. Placing unilateral restrictions or prices on U.S. GHG emissions, without similar regulations in operation on other major emitting nations, would disadvantage U.S. manufacturers, impact millions of jobs, and result in higher prices for natural gas, electricity, gasoline and other energy commodities.

Senator Inhofe has filed an amendment that would prevent EPA from implementing costly greenhouse gas regulations for power plants, refineries and other industrial facilities.

Senator Barrasso has an amendment that would protect exports from being blocked by unnecessarily broad environmental reviews under the National Environmental Policy Act (NEPA). Expanding NEPA to consider the environmental impact of the cargo could hamper exports of many products, such as cars, tractors, agricultural products, electronics, toys, steel, chemicals, pumps, air conditioners, elevators and airplanes.

Also, Senator Hoeven has an amendment on the floor to approve the Keystone XL pipeline. Keystone XL would create tens of thousands of manufacturing and construction jobs and provide manufacturers with an affordable source of energy. We have continued to urge the Administration to approve the pipeline as soon as possible.

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The Economic Outcomes of a Carbon Tax

Late this afternoon a group of House Republicans lead by Congressman Scalise (R-LA) held a press conference to announce a resolution opposing a carbon tax. Late last month the NAM released the results of a study by nonpartisan NERA Economic Consulting which found a carbon tax would have a negative effect on jobs, energy costs and manufacturing output.

Today, the NAM sent a letter to Congressman Scalise outlining the findings of the study. Below is an excerpt from the letter:

“NERA concluded that the increased costs of coal, natural gas and petroleum products due to a carbon tax would ripple through the economy, resulting in higher production costs, less spending on non-energy goods, fewer jobs and slower economic growth. Nationally, a carbon tax designed to reduce CO2 levels by 80 percent could place tens of millions of jobs at risk and raise gasoline prices by over $10 a gallon, natural gas prices by almost $60 per MMBtu, and residential electricity prices by over 40 percent. NERA also found that a carbon tax would have a negative impact on manufacturing output. In energy-intensive sectors manufacturing output could drop by as much as 15.0 percent and in non-energy-intensive sectors by as much as 7.7 percent. The overall impact on jobs would be substantial, with a loss of worker income equivalent to between 1.3 million and 1.5 million jobs in 2013 and between 3.8 million and 21 million by 2053.”

Yesterday, a bicameral group of Democrats released a discussion draft of a carbon tax plan. The NAM’s Ross Eisenberg posted here on Shopfloor.org yesterday regarding their efforts.

The bottom line is a carbon tax resembling the one in our study would drive up energy prices and make it more expensive to manufacture in the United States.

 

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A Carbon Tax Will Drive Up Energy Prices and Damage Economy

Today, Representatives Henry Waxman and Earl Blumenauer and Senators Sheldon Whitehouse and Brian Schatz released a discussion draft of legislation that proposed to place a carbon tax on greenhouse gas emissions.  The lawmakers are seeking input on various aspects of their legislation, including the tax rate and how revenues will be spent.  The discussion draft and related background materials can be found here.

Late last month, the National Association of Manufacturers released the results of a study looking at the economic consequences of a carbon tax. The study, conducted by NERA Economic Consulting, examined two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. Revenues were recycled into deficit reduction and reduction of income tax rates.  Both scenarios modeled ($20 a ton and 80% reductions) had a devastating impact on the economy and manufacturers.

NERA concluded that the increased costs of coal, natural gas and petroleum products due to a carbon tax would ripple through the economy, resulting in higher production costs, less spending on non-energy goods, fewer jobs and slower economic growth. Nationally, a carbon tax designed to reduce CO2 levels by 80 percent could place tens of millions of jobs at risk and raise gasoline prices by over $10 a gallon, natural gas prices by almost $60 per MMBtu, and residential electricity prices by over 40 percent.

Our study also found that a carbon tax would have a negative impact on manufacturing output. In energy-intensive sectors manufacturing output could drop by as much as 15.0 percent and in non-energy-intensive sectors by as much as 7.7 percent. The impact on jobs would be substantial, with a loss of worker income equivalent to between 1.3 million and 1.5 million jobs in 2013 and between 3.8 million and 21 million by 2053.

A carbon tax resembling the one in our study would drive up energy prices, make it more expensive to manufacture in the United States, and harm our ability to compete with other nations. The NAM believes that any benefits of a carbon tax—under both carbon tax cases—would be far outweighed by the negative impacts to the overall economy.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

 

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White House Should Stay True to Their Promise and Avoid a Carbon Tax

A potential proposal of a carbon tax and all the damage that would accompany such misguided policies has been making headlines in Washington of late. Senators Barbara Boxer (D-CA) and Bernie Sanders (I-VT) have introduced legislation that would implement this damaging tax.

The NAM weighed in on the issue today with the release of a study conducted by NERA Economic Consulting, titled Economic Outcomes of a U.S. Carbon Tax. The report found that levying such a tax would impact millions of jobs and result in higher prices for natural gas, electricity, gasoline and other energy commodities. Manufacturing output in energy-intensive sectors could drop by as much as 15.0 percent and in non-energy-intensive sectors by as much as 7.7 percent.

This week Treasury Secretary Nominee Jack Lew said that, “the Administration has not proposed a carbon tax, nor is it planning to do so.”

Senator David Vitter (R-LA), the ranking Senator on the Environment and Public Works Committee, has sent President Obama a letter asking if the Administration will live up to Mr. Lew’s promise.

With the evidence from the NAM’s report so clear that a carbon tax would have a catastrophic economic impact, we hope that the President will uphold his promise to never propose such a foolhardy, punitive tax that would undermine the U.S. economy.

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Waxman-Markey: Let’s At Least Be Straight About the Jobs

The Economist’s U.S. correspondent, who writes under the nom de plume of “Lexington,” is exasperated about the lack of straight talk from Congressional advocates for government limits on greenhouse gas emissions. Lexington believes in taking action, with the most straightforward way being a carbon tax. But, since the public regards taxes as bad, politicians “waffle and obfuscate” on energy policy.

From “The myth of green jobs“:

John Kerry, who is neither stupid nor ignorant, claims not to know what “cap and trade” means

And Barbara Boxer, asked what the government should do to create jobs, said we should pass an energy bill, ie, the cap and trade bill that dare not speak its name. This, she said, would “allow this economy to take off“.

For heaven’s sake. The point of putting a cap or a tax on carbon emissions is to curb carbon emissions, thereby saving the planet from cooking. It is not about creating jobs. It will certainly create some, but it will destroy plenty, too.

Both presidential candidates last year vigorously promoted the notion that halting climate change will not merely be painless but will actually provide a huge boost to the economy. Kevin Hassett explains why this is nonsense

If politicians insist on pretending that everything is a free lunch, they should not be surprised if a) many voters don’t believe them and b) the rest get angry when the bill arrives. 

The Senate bill sets a target of reducing C02 emissions by 20 percent from 2005 levels by 2020. The House bill set a target of a 17. The NAM and the American Council for Capital Formation analyzed the House bill, Waxman-Markey, and found the legislation would result in up to 2.4 million lost jobs, higher energy prices for businesses and consumers, and cumulative GDP losses of up to 3.1 trillion dollars over an 18-year period.

Yeah, for heaven’s sake.

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The Financial Crisis is Here, Now, the Global Warming Crisis…

In today’s Hartford Courant, an op-ed by David Ridenour of the National Center for Public Policy Research, “Green Mandates Burden Economy“:

When our economic bus is teetering at the edge of a cliff, it’s a bad time to throw on some extra weight.

Yet government-mandated restrictions on carbon emissions would do precisely that, adding enormous additional weight to an economy already reeling. This additional weight shouldn’t just be thrown from the bus — it should be thrown under it.

And from respected columnist Michael Barone, prognosticating on the political agenda under a possible Obama presidency and Democratic-controlled Congress, “Obama’s Wish List“:

Much of the next Congress’s time and psychic energy will be taken up with refashioning financial regulation — a subject of considerable difficulty. And the looming recession will make it politically risky for Democrats to push big spending programs.

This means that Congress in the next two years may not pass Obama’s national health-insurance plan. The weakening economy and the enraged reaction earlier this year to $4-a-gallon gasoline also make it less likely that Congress will pass carbon reduction legislation — certainly not a carbon tax and probably not a cap-and-trade system.

Perhaps we get a test of the theory — economic reality winning against environmental mongering — in Tuesday’s California election, specifically Proposition 10, which authorizes sale of $5 billion in bonds to finance rebates for buying alternative-fuel vehicles and research into renewable fuels. From The LosAngeles Daily News, “Bond measures facing hard sell in time of economic crisis“:

Backers say 10 would help reduce California’s greenhouse-gas emissions blamed for global warming, improve air quality and jump-start the market for alternative-fuel vehicles.

But opponents say the state can’t afford the bond measure, which would eventually cost $9.8 billion, or about $325 million annually, over 30 years.

Afterthought: Come to think of it, California probably couldn’t afford it, even if there weren’t any financial crisis.

UPDATE (1 p.m.): Should have thought to check on California’s ongoing budget collapse. From CMTA.net:

Oct. 31 , 2008
The Governor announced this week that he will call the Legislature to a Special Session to address the state’s fast growing deficit.  Estimates of the shortfall for this year has grown from $3 billion to $10 billion or more as the state brings in lower than expected tax revenues and experiences higher costs due to the continued slide of the global economy.

You would think that a $10 billion deficit would put a crimp on social engineering, but it’s California.

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