The fact that the Waxman-Markey cap-and-trade bill--officially known as the American Clean Energy and Security Act (ACES)--passed the U.S. House by a razor-thin margin proves that members of both parties have deep concerns about this legislation. And rightfully so. Although the U.S. Chamber supports comprehensive legislation to reduce greenhouse gas emissions, we believe that ACES is fundamentally flawed.
From the outset, the U.S. Chamber conditioned its support of any climate change bill on these fundamental principles: balancing environmental objectives with the need for economic growth and job creation, promoting technology development and deployment, investing in clean energy, promoting energy efficiency, and addressing climate change as a global challenge. ACES fails every one of these tests.
This bill does not address the international nature of climate change. For example, even if the United States completely eliminated carbon emissions, global levels would still rise because developing countries' emissions are rapidly growing. Increasing our domestic energy prices would put U.S. businesses at a disadvantage. In fact, many American jobs would likely be shipped overseas where energy is cheaper and environmental restrictions are more lax. Does anyone think this would be a good idea in the midst of the worst recession since the Great Depression?
Additionally, ACES would impose tariffs on products produced by other countries that don't impose similar curbs on greenhouse gas emissions. This would violate our international trade obligations and could incite a devastating trade war that would cripple American exporters.
Equally problematic is the impact that ACES would have on fuel prices. The Congressional Budget Office estimates that the cost impact could be as much as $0.77 per gallon for gasoline, $0.83 per gallon for jet fuel, and $0.88 per gallon for diesel fuel--all ultimately borne by the consumer.
While cap-and-trade might successfully reduce our use of the carbon-based fuel sources that power our economy, it does very little to make up for it and provide the country with the energy we need to grow and thrive.
And what about the cost? A study released by the National Black Chamber of Commerce estimates annual drops in GDP of $170 billion in 2015, $350 billion in 2030, and $730 billion in 2050. The same study concludes that 2.5 million to 3 million jobs would be lost.
The American Clean Energy and Security Act is a flawed bill that requires substantial revision. A clean energy future and economic growth aren't incompatible, and we plan to work with the Senate to reconcile these two goals.