I came across a thoughtful article discussing how many jobs we can expect to lose or create due to a cap-and-trade bill.
The article appeared in the most unexpected of places: a site called FactCheck.org, and it highlighted the wrestling match opponents and supporters are having on the topic.
Two sides, two dramatically divergent claims. On one end of the debate is the National Association of Manufacturers, which asserts a U.S. will cost the country 2.4 million jobs. These are projected losses by 2030.
On the other end is President Barack Obama and proponents of the legislation, who say 1.7 million jobs will appear. Their forecast assumes $150 billion of annual business investment in clean energy.
So who’s right?
According to the non-partisan Congressional Budget Office, slow job growth is the more likely outcome. The CBO in a September report anticipates a small decline in employment as labor markets adjust. Over time, jobs will shift from the fossil-fuel dependent industries to companies serving or taking advantage of the growth of alternative energies.
A similar assessment came from the Energy Department’s Energy Information Administration. The organization laid out several best-case and worst-case scenarios. In the best case scenario, employment grows very slightly in the early years of a cap and trade bill, but ends up down 388,000 jobs by 2030 due to the legislation.
In the worst cane alternative, 2.3 million positions will be killed by 2030 due to the bill.
The European Union’s experience with its own cap and trade systems appears to suggest more optimism. The EU anticipates the creation of 400,000 jobs by 2020, or a 30 percent increase in its renewable energy industry. Investments by convention energy companies, on the other hand, have fallen and the economy has had to live with the reduced competitiveness of higher energy prices.
Conservatives also complain that wildly fluctuating prices in the region’s $59 billion carbon trading market cause confusion. During the first years of the system, rapidly falling energy prices did truly create havoc.
However, the EU did achieve as much as a 5 percent reduction in CO2 emissions, which the Congressional Budget Office points out is important.
A strong consensus is building that the impact will be potentially serious and costly if nothing is done, the CBO says, with the viability of some economic sectors in question.