The Economic Consequences of Waxman-Markey: An Analysis of the American Clean Energy and Security Act of 2009

(Analyst's note: A new study directly challenges government analyses and exposes the devastating effects cap-and-trade would have on individual families, the job market and the nation's finances. You will want to review this absolutely must read report, so please click on the title above for the balance of the original item. Do you ever wonder who these people in Washington think they work for anyway?)

by David Kreutzer, Ph.D., Karen Campbell, Ph.D., William W. Beach, Ben Lieberman and Nicolas Loris

Center for Data Analysis Report #09-04

Do you want to pay more for less energy?

When they return from their August vacations, Senators will debate the Waxman-Markey cap-and-trade legislation, which is intended to curb global warming. As lawmakers debate the proposal, which already passed the House, Heritage Foundation experts are once again reminding Americans of the significant economic losses the nation faces should the plan become law.

After a truncated debate and last-minute changes, the House of Representatives narrowly passed climate-change legislation on June 26, 2009, designed by Henry Waxman (D-CA) and Edward Markey (D-MA). The 1,427-page bill would restrict greenhouse gas emissions from industry, mainly carbon dioxide from the combustion of coal, oil, and natural gas.

Since energy is the lifeblood of the American economy, 85 percent of which comes from CO2-emitting fossil fuels, the Waxman-Markey bill represents an extraordinary level of economic interference by the federal government. For this reason, it is important for policymakers to have a sense of the economic impact that accompanies any environmental benefits.[1]

Analysis by The Heritage Foundation's Center for Data Analysis (CDA) makes clear that Waxman-Markey promises serious perils for the American economy for the years and decades ahead. Waxman-Markey requires arbitrary and severe restrictions on the current energy supply and infrastructure. These restrictions can be met only through large-scale deployment of still-undeveloped or uneconomical technologies and alternative energy sources. In addition to the direct impact on consumers' budgets through higher electric bills and gasoline prices, the resultant increase in energy costs will reverberate throughout the economy and inject unnecessary inefficiencies at virtually every stage of production. It would suppress economic activity and reduce employment, especially in the manufacturing sector. Virtually all costs would eventually filter down to the American people. ....