Economic Impact of the American Clean Energy and Security Act of 2009 on the West Virginia Economy 2009-2030
A new report released yesterday by West Virginia University says that the U.S. Senate’s cap and trade bill would decrease the state’s gross domestic product by $1.8 billion in the next 20 years.
The report, titled “Economic Impact of the American Clean Energy and Security Act of 2009 on the West Virginia Economy 2009-2030,” was published by the Bureau of Business and Economic Research, College of Business and Economics at WVU.
The focus of the study is on S. 1733, the Clean Energy Jobs and American Power Act. The bill was introduced Sept. 20, 2009, by Senators John Kerry, D-Mass., Chairman of the Foreign Relations Committee, and Barbara Boxer, D-Calif., Chairman of the Committee on Environment and Public Works.
If implemented, it would cut carbon dioxide emissions by 20 percent by 2020, bringing them down to 2005 levels; a 3 percent increase over the cuts called for by the H.R. 2454, the American Clean Energy And Security Act of 2009. Known as the Waxman-Markey Bill, the legislation was passed in the House in June, 2009.
The WVU study lists the following effects of the Senate Cap and Trade bill on West Virginia:
- West Virginia’s gross domestic product would be $1.8 billion less in 2030.
- West Virginia would have 22,700 fewer jobs in 2030.
- West Virginia’s population would be 24,600 lower by 2030.
- Every industry sector has fewer jobs with the ACESA.
- The largest declines in employment are in government, health care and social assistance, mining, and retail trade.
- The average annual wage in the state is 1.1 percent lower in 2030.
- West Virginia residents’ share of income from earnings declines.
- West Virginia residents become more reliant on transfer payments as both transfer payments per capita and the share of income from transfer payments both increase.
The provisions in the ACESA will potentially affect West Virginia’s economy in a number of ways. First, the ACESA will impact the national economy and that will have an impact on the West Virginia economy.
Second, the ACESA will result in higher electricity prices in the state.
Third, the ACESA will result in decreased coal production in the state.
Fourth, the ACESA will result in decreased state and local government spending as government revenues decline due to reduced coal production and the general decline in economic activity in the state.
Finally, energy efficiency provisions within the ACESA may increase spending on goods and services that provide greater energy efficiency and decrease the demand for electricity in the state. In addition, there may be an increase in energy-related investment spending.