EPA Analysis: Jobs and Household Incomes Increase Under Waxman-Markey Climate Policy

From the NRDC Switchboard:

Laurie Johnson

Chief Economist, Climate Center, Washington, DC

Posted April 22, 2009

Today EPA released an analysis of what the economy might look like if the proposed Waxman Markey bill were enacted. This legislation would finally put a cap on dangerous global warming pollution, driving investments that will create millions of clean energy jobs, reduce our dangerous dependence on oil, and help protect the planet. The results provide good news on many issues (and are consistent with many previous studies). For now let's focus on overall income.

EPA finds that under the Waxman-Markey proposal,

• Households will become 18-19% richer between 2010 and 2020, and by 36-40% by 2030. Translating these numbers into a more familiar unit, this means median household incomes would be approximately $9,000 higher in 2020 from today's levels, and over $18,000 more in 2030.
• By 2050, median household income would be over $45,000 higher than it is currently.
• Renewable energy penetration will increase more than 150% over the next two decades, and this is before modeling the bill's renewable electricity standard (given time constraints, EPA could not model this provision yet). Since renewables create almost 3 times as many jobsas fossil energy, we'll have more jobs.
• GDP would grow 30% by 2020, 70% by 2030, and over 200% by 2050, also translating into more jobs.

In contrast to these impressive gains,

• Over the entire life of the bill, from 2010 to 2050, EPA estimates that the average household will need to invest only $98-$140 per year, a little over a dime a day per person.

Obstructionists will undoubtedly continue to claim that climate legislation is too costly, but the EPA study provides an essential perspective for anyone who wants to evaluate these claims objectively. Even if investing in climate protection carries a small price tag, the cost will be much lower than the opposition says, and it will be more than offset by the economic gains presented by the EPA's analysis. And let us not forget: the cost of doing nothing would be far higher. We can tackle global warming, move to clean energy, and grow the economy at the same time.