“Cap and Trade” to Cost SC Jobs
Proposals now before Congress seek to reduce greenhouse gas emissions in the United States through a “cap‐and‐trade” system, under which U.S. producers would receive tradable permits to emit greenhouse gasses. Producers buying the permits would, in effect, pay a tax for the privilege of emitting greenhouse gasses currently emitted without charge. The resulting “carbon tax” would have a negative effect on production and employment, according to an economic analysis by the Beacon Hill Institute.
Increased energy prices under cap-and-trade would inflict significant harm on the South Carolina economy.
- The South Carolina economy would shed 1,763 jobs by 2020 and 20,605 jobs by 2050.
- Gross per-capita wages would fall by $322.53 annually by 2020 and $2,689.63 by 2050.
Job losses and price increases would combine to reduce real incomes as firms, households and governments spend more of their budgets on energy and less on other items, such as home goods, entertainment and clothing. As a result:
- Real disposable income would fall by $1.71 billion per year by 2020 and $14.27 billion by 2050.
- Annual investment in the state would fall by $201.34 million by 2020 and $1.68 billion by 2050.
State and local government tax collections would also suffer from the economic damage. By 2020, the state of South Carolina can expect annual tax revenues to fall by $160.87 million, while local governments would lose $195.09 million in tax revenue, for a combined state and local revenue loss of $355.96 million. By 2050, the state and local government tax revenue losses would swell to over $2.97 billion, with the state losing $1.34 billion and local governments losing $1.63 billion.
Nothing in the foregoing should be construed as an attempt to aid or hinder passage of any legislation. Copyright 2009. South Carolina Policy Council Education Foundation, 1323 Pendleton Street, Columbia, South Carolina 29201. Follow the Policy Council on Facebook at www.facebook.com/scpolicycouncil or Twitter at www.twitter.com/scpolicycouncil.