Tag

manufacturnig

The Economic Outcomes of a Carbon Tax

By | Economy | No Comments

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.

 

U.S. Trade Deficit Plunges in December

By | Economy | No Comments

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit fell from $48.6 billion in November to $38.5 billion in December. This was the lowest deficit since January 2010, and it resulted from an uptick in goods exports and corresponding decrease in goods imports. Goods exports rose from $129.3 billion to $132.6 billion, and goods imports dropped from $194.9 billion to $188.8 billion. In December we also saw the surplus in trade services increase by $669 million to $17.7 billion.

Petroleum was part of the story, but not all of it. The petroleum trade balance declined from $23.4 billion to $18.7 billion. Petroleum exports were up by $926 million to $11.6 billion, and imports declined by $3.7 billion to $30.3 billion. Illustrating just how much this figure has changed, the petroleum trade balance was $29.9 billion in January 2012, suggesting a drop of over $11 billion throughout the year. The price of West Texas intermediate crude also dropped during that time frame from $100.24 per barrel in January to $88.25 a barrel in December. (It has since risen, averaging $94.69 in January 2013.)

Outside of oil, there were some positives in the goods markets. Most notably, the largest change occurred within industrial supplies and materials, with exports up $3.8 billion and imports down $4.2 billion. Outside of industrial supplies, the largest net winner was foods, feeds, and beverages (up $96 million). There were fewer net exports among non-automotive capital goods (down $431 million), automotive vehicles and parts (down $292 million), and consumer goods (down $240 million).

On the goods imports side of the ledger, there were declines across-the-board in all major categories except consumer goods, which eked out a gain of $43 million. Sectors with reduced imports – beyond industrial supplies – included automotive vehicles and parts (down $944 million), non-automotive capital goods (down $264 million), and foods, feeds, and beverages (down $75 million). Read More