EPA Regulation of Carbon will Harm US Economy


Posted by Brian M Johnson on Monday, January 25th, 2010, 1:24 PM PERMALINK

Today, Americans for Tax Reform sent the below letter to EPA Administrator Lisa Jackson in response to her letter responding to Congressman Walden (R-Ore.) and Congressman Barton’s (R-Texas) letter about the effects an Environmental Protection Agency (EPA) carbon regulation scheme would have on United States employment and the economy.

Click here for the PDF version of the below letter.


Administrator Lisa Jackson
U.S. Environmental Protection Agency
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460   

Dear Ms. Jackson:

In your January 11, 2010 response to Congressman Walden (R-Ore.) and Congressman Barton’s (R-Texas) letter about the effects an Environmental Protection Agency (EPA) carbon regulation scheme would have on United States employment, you wrote:

[The EPA] is committed to fashioning any Clean Air Act rules in a manner that minimizes any job losses and enhances the U.S. economy's potential for job growth to the maximum extent allowed by law.

While it is not the intent of the EPA to foster job loss, any carbon regulation your agency undertakes will have this effect. Carbon regulation would be achieved through taxes and penalties on persons or companies which currently emit, in the EPA’s eyes, undesirable amounts of carbon.

Such a system was proposed this summer in H.R. 2454, The American Clean Energy and Security Act. Nearly unanimous consent was reached among those who studied this legislation; its’ passage would ensure millions of jobs lost and cost America hundreds of billions for the coming decades.

The National Black Chamber of Commerce found that, even after accounting for “green job creation,” cap-and-trade will result in the loss of 2.3-2.7 million jobs each year through 2030

The Heritage Foundation projects that the average GDP lost is $393 billion, hitting a high of $662 billion in 2035. From 2012 to 2035, the accumulated GDP lost is $9.4 trillion

In addition, the Heritage Foundation estimates that in 2035, there will be 2.5 million fewer jobs than without a cap-and-trade bill

From 2012 through 2035, taxpayers will end up paying $5.7 trillion in energy taxes created under cap-and-trade

According to the Brookings Institute cap-and-trade will cause a loss of personal consumption of $1-2 trillion

Although you express a sincere desire to “minimize job losses,” millions of Americans would find themselves unemployed under an EPA ran carbon regulation system.
Cap-and-trade, or other forms of carbon regulations, would hit one of America’s largest energy producers the hardest, the oil refining industry. EnSys Energy also analyzed H.R. 2454 and found that carbon regulation would jeopardize the US Oil Refining Industry.

Increased “variable” costs will be crippling for this sector:

In 2015 allowance costs for direct refinery emissions will be from $2.5 to $5.7 billion

Increase costs per barrel $0.5 to $1.2, an average increase of 20% to 50%

By 2030 the costs would increase to $14.8 to $32 billion. A per barrel increase of $2.7 to $7.2, which is a 100%-300% increase

The numbers outlined above are not of inconsequential significance, they speak directly to employment, GDP, and one of America’s largest industries.

You continued in your January 10, 2010 letter saying that the EPA wasn’t required to conduct an economic analysis of its endangerment finding, and that the appropriate time to consider economic impacts is when crafting regulations.

While taking steps towards ultimately taxing emissions, such as declaring CO2 a toxin and by requiring companies to begin calculating emission amounts, it is disconcerting that the EPA openly advocates policies which it has not extensively researched.

I urge you to fully consider the economic impact carbon regulation would have on the economy. Using your own metric, any system the EPA implements will look to “minimizes any job losses and enhances the U.S. economy's potential for job growth.” By this rationale, it is nearly impossible to endorse regulation that taxes carbon emissions.

For more information, please contact federal affairs manager Brian Johnson in my office at 202.785.0266 or bjohnson@atr.org.

Onward,
 
Grover G. Norquist

cc:    Representatives Barton
Representative Walden
President Obama

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