California Cap and Trade: Killing Jobs for Families

If I wanted to harm families and businesses, I would increase taxes. Guv Brown has decided to raise your gas taxes—and that will take a little from the economy. Then he is spending the money on his choo choo train, which will be, till killed, a massive drain on government resources—causing more taxes to be raised and services cut. At this point the tax is about ten cents—but in the State of Washington, a study shows the tax will be between seven and fifteen percent. For Californians that means, at these gas prices, a tax of between 15 cents and 30 cents. When gas goes back up to $4.00 a gallon the tax will be at least 50 cents a gallon—a really big hit on the economy and jobs.

Cap and trade is not about the climate—it is an excuse to raise tax dollars—period.

“Washington Gov. Jay Inslee, a Democrat, proposed a state cap-and-trade program in December 2014 that would cost the economy $1 billion a year. Inslee’s own advisers say the program would raise fuel costs by 7 to 15 percent by 2035, compared to baseline estimates.”

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Study: Cap-and-trade kills jobs

By Jason Russell, Washington Examiner,   1/5/15
Cap-and-trade programs kill manufacturing jobs, according to new research published by the National Bureau of Economic Research.

Cap-and-trade programs kill manufacturing jobs, according to new research published by the National Bureau of Economic Research.

The study says that manufacturing jobs were reduced by 1.3 percent in affected areas after the EPA implemented a cap-and-trade program in 20 eastern states in the 2000s. Cap-and-trade cost over 110,000 jobs total in the affected states. Manufacturers in the top quartile of energy-users cut jobs by 3.9 percent more than low energy-users in the bottom quartile.

The job cuts primarily affected young workers, while newly hired workers saw their earnings fall. Rather than firing workers, most of the employment reductions came from reduced hiring — which is why older workers fared better than new ones.

There are several possible causes for the manufacturing job losses caused by cap-and-trade. Many firms were affected by higher energy costs. But large manufacturing plants that produce their own energy were directly regulated under the cap-and-trade program. “Direct regulation may have led existing firms to decrease employment and discouraged new firms from locating in the regulated region,” the study speculated.

The EPA implemented cap-and-trade in 20 states under the NOx Budget Trading Program starting in 2003.

The study acknowledged that cap-and-trade programs are preferable to command-and-control style environmental regulations. While the program added “substantial costs to energy producers,” the study acknowledged emissions from power plants were “dramatically decreased.”

The paper was authored by Mark Curtis, an assistant professor of economics at Wake Forest University, and published by the NBER Working Paper Series.

In addition to the regional scheme in the east, California implemented its own cap-and-trade program in 2012. Nine northeastern states established a cap-and-trade program under the Regional Greenhouse Gas Initiative in 2005.

Washington Gov. Jay Inslee, a Democrat, proposed a state cap-and-trade program in December 2014 that would cost the economy $1 billion a year. Inslee’s own advisers say the program would raise fuel costs by 7 to 15 percent by 2035, compared to baseline estimate

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

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  1. […] (only 16 percent priority) with $250 million of funding from the California Air Resources Board’s cap-and-trade tax on industries and public utilities (only 26 percent […]

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