Heritage Foundation Releases Economic Study of Waxman-Markey Cap and Trade Bill

Heritage Foundation Releases Economic Study of Waxman-Markey Cap and Trade Bill
Posted August 6th, 2009 at 1.07pm in Energy and Environment.
The idea behind cap and trade is to reduce carbon dioxide emissions by putting a price on the right to emit carbon and other greenhouse gases on businesses. Since 85 percent of America’s energy needs come from carbon-emitting fossil fuels, cap and trade would be massive tax on energy consumption if enacted.

The debate will move to the Senate this fall. Here’s what to expect if the Senate passes their own version Waxman-Markey and President Obama signs cap and trade into law.

By 2035:


• Gasoline prices will rise 58 percent. Gas prices are expected to increase in the future even without cap and trade. Waxman-Markey would add an additional $1.38 to that increase.
• Natural gas prices will rise 55 percent;
• Heating oil prices will rise 56 percent;
• Electricity prices will rise 90 percent;
• A family of four can expect to per-year energy costs to rise $1,241;
• Including taxes, a family of four will pay an additional $4,609 per year;
• A family of four will reduce its consumption of goods and services by up to $3,000 per year, as its income and savings fall;
• Aggregate GDP losses will be $9.4 trillion; in other words, we will be $9.4 trillion poorer with cap and trade than without.
• The government will collect $5.7 in energy tax revenue
• Job losses will be nearly 2.5 million; and
• The national debt will rise an additional $5 trillion ($12,803 per person or $51,212 per family of four).
(All figures are in constant 2009 dollars.)