The Heritage Foundation has released a new report titled, “The Economic Consequences of Waxman-Markey: An Analysis of the American Clean Energy and Security Act of 2009” (Waxman-Markey bill). The report analyzes the Waxman-Markey bill after it was significantly amended prior to passing the House of Representatives on June 26, 2009.
The report shows that despite the considerable amount of free allowances issued in the early years, the bill would still significantly affect energy costs. Most noteworthy, according to the report, Wisconsin would be one of the most adversely affected states by the cap-and-trade legislation.
According to the study:
- Cumulative gross domestic product (GDP) losses are $9.4 trillion between 2012 and 2035.
- Single-year GDP losses reach $400 billion by 2025 and will ultimately exceed $700 billion (all costs cited are adjusted for inflation to 2009 dollars).
- Net job losses approach 1.9 million in 2012 and could approach 2.5 million by 2035. Manufacturing loses 1.4 million jobs in 2035.
- A typical family of four will pay, on average, an additional $829 each year for energy-based utility costs; and
- Gasoline prices will rise by 58 percent ($1.38 more per gallon) and average household electric rates will increase by 90 percent.
The study also finds that not all sectors will be affected evenly. According to the report, the construction industry would be most affected, losing 8.5 times as many of its jobs than the economy as a whole. Below are the other industries most adversely affected by Waxman-Markey:
- Textile industry – job-loss rate 7.8 times the rate of overall job loss;
- Wood products – 7.1 times the rate of overall job loss;
- Durable manufacturing – 5.9; and
- Manufacturing – 4.4.
Last, according to the report, the legislation will have added 9.1 trillion nominal dollars to the national debt, which leads to an increased tax liability of $12,803 for every American, or a $51,216 liability for a family of four.