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ACCF/NAM State by State Analyses of the Economic Impact of the

Lieberman-Warner Climate Security Act

The American Council for Capital Formation (ACCF) and the National Association of Manufacturers
(NAM) unveiled a jointly commissioned study assessing the potential national and state economic
impacts resulting from proposed climate change legislation, America's Climate Security Act of 2007
(S. 2191), authored by U.S. Senators Joseph Lieberman and John Warner.

S. 2191 aims to reduce total U.S. greenhouse gas emissions with the goal of lowering emissions 63
percent below their 2005 levels by the year 2050. These reductions would be achieved through a
system that would call for companies to cap their emissions, and then to have them trade emissions
rights with each other.

Conducted by Science Applications International Corporation (SAIC) using assumptions provided by


ACCF and NAM, the study unveiled today examines the implications of the legislation with respect to
Gross Domestic Product and Gross State Product, future energy costs, economic growth,
employment, production, household income, the impact on low income earners and other
measurements.

The following pages are specific overviews of the impacts the legislation could have on each of the 50
U.S. states.

About NAM
The National Association of Manufacturers is the nation’s largest industrial trade association,
representing small and large manufacturers in every industrial sector and in all 50 states.
Headquartered in Washington, D.C., the NAM has 11 additional offices across the country.

About ACCF
The American Council for Capital Formation (www.accf.org) is a nonprofit, nonpartisan organization
dedicated to the advocacy of tax and environmental policies that encourage saving and investment.
The ACCF was founded in 1973 and is supported by the voluntary contributions of corporations,
associations, foundations, and individuals.
Alabama
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs) 2. Loss in Employment
Figure
2020 2030
. 0
Impact on Jobs
-10
Under L/W, Alabama would lose 17,200 to 25,874 jobs in
Thousands of Jobs

2020 and 44,721 to 59,530 jobs in 2030 (Figure 2). The -20 -17.20

primary cause of job losses would be lower industrial -30 -25.87


output due to higher energy prices, the high cost of
complying with required emissions cuts, and greater -40
competition from overseas manufacturers with lower -50 -44.72
energy costs.
-60
-59.53
AL-Low AL-High
Decrease in Disposable Household Income -70
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Alabama would see disposable household
Figure 3: Household Impact Relative to Baseline
income reduced by $805 to $2,611 per year by 2020 and
(Annual Dollars Lost3.per
Figure Household)
Loss of Disposable Income
$3,431 to $6,257 by 2030 (Figure 3).
per Household
2020 2030
L/W’s Impact on Energy Prices 0
Most energy prices would rise under L/W, particularly coal, -1,000 -805
oil, and natural gas. The price of gasoline in Alabama
would increase between 74% and 144% by 2030, while -2,000
electricity prices would increase by 122% to 159%. Table 1
Dollars

-3,000 -2,611
shows the increase in electricity, gasoline, and natural gas -3,431
-4,000
prices faced by a typical Alabama household compared to
national household increases. Alabama residents would pay -5,000
between 99% and 142% more for their natural gas by 2030. -6,000
AL Low AL High -6,257
-7,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and AL
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 32% 40%
would result in the electric industry shutting down most (Residential) 2030 122% 159%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 25% 35%
have to substitute high cost technologies, such as biomass
(Residential) 2030 99% 142%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output Figure 4.(Billion
to Baseline Loss in2007$)
Gross State Product
are estimated to reduce Alabama’s gross state product $0.00
2020 2030
(GSP) by between $1.9 and $2.6 billion per year by 2020
-$1.00
and $6.8 and $8.1 billion by 2030 (Figure 4).

B illio ns o f D o lla rs
-$2.00
-$1.86
Impact on Industry -$3.00 -$2.57
-$4.00
Alabama’s major economic sectors will be affected by
emission caps (Figure 5).4 The current two largest sectors, -$5.00

transportation manufacturing and paper manufacturing, -$6.00


show decreases in output of 5.9% to 13.2% and 4.8% to -$7.00
-$6.85
6.5%, respectively in 2020. All manufacturing sectors will -$8.00
AL- Low AL - High -$8.08
suffer output losses of between 3.5% and 5.9% by 2020, -$9.00
while output from energy intensive sectors fall between
7.5% and 9.5%. Alabama’s coal production would fall
between 18.5% and 22.1%, although due to its low cost of Figure 5:Percent
Figure 5. ImpactChange
on Industrial
in OutputValue of Shipments
by Industry in
generation, electricity supply could rise slightly over the Percentage Change from
2020 Baseline in 2020
0%
baseline forecast (Figure 6). These continued losses will
have a lasting effect on the economic base of Alabama.
-5% -3.5%
-4.8%
5 -5.9% -5.9%
Impact on Low Income Families -7.5%
-6.5%
-10%
The impacts of L/W will be felt especially by the poor, who -9.5%
spend more of their income on energy and other goods than
-15% -13.2%
other income brackets. By 2020, higher energy prices mean
that low income families in Alabama (with average AL Low AL High
incomes of $12,945) will spend between 22% and 25% of -20%
their income on energy under L/W compared to a projected MAN EIS TRAN PAP
19% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately. Figure 6: Impact
Figure on Production
6. Percent Change in Production by
Percentage Change frominBaseline
Sector 2020 in 2020
Impact on State Budgets6 5% 1.5% 0.9%
The increases in Alabama’s energy costs under L/W will 0%
impact expenditures throughout the state. Specifically, -5%
Alabama’s 2,069 schools and universities and 134 hospitals -10%
will likely experience a 28% to 35% percent increase in -15%
expenditures by 2020 and a 91% to 123% increase by 2030. -20% -18.5%
For government entities, costs for services, including public -22.1%
-25% AL Low AL High
transportation and vehicle fleets, such as school buses, will
-30%
also rise under L/W.
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; TRAN = Transportation equipment manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Alaska
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could
Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3
(Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
Impact on Jobs 0
.

-1
Under L/W, Alaska would lose 2,466 to 3,710 jobs in 2020
-2
and 6,411 to 8,534 jobs in 2030 (Figure 2). The primary
Thousands of Jobs

-3 -2.47
cause of job losses would be lower industrial output due to
-4
higher energy prices, the high cost of complying with -3.71
-5
required emissions cuts, and greater competition from
-6
overseas manufacturers with lower energy costs. -6.41
-7
-8
Decrease in Disposable Household Income -9 -8.53
AK-Low AK-High
Higher energy prices would have ripple impacts on prices -10
throughout the economy and would impose a financial cost
on households. Alaska would see disposable household
income reduced by $1,095 to $3,552 per year by 2020 and
$4,548 to $8,294 by 2030 (Figure 3). Figure 3: Household Impact Relative to Baseline
Figure 3. Loss of Disposable Income
(Annual Dollars Lost per Household)
L/W’s Impact on Energy Prices per Household
2020 2030
Most energy prices would rise under L/W, particularly coal, 0
oil, and natural gas. The price of gasoline in Alaska would
-1,095
increase between 72% and 151% by 2030, while electricity -2,000
prices would increase by 38% to 49%. Table 1 shows the
D o lla r s

increase in electricity, gasoline, and natural gas prices faced -4,000 -3,552
by a typical Alaska household compared to national -4,548
household increases. Alaska residents would pay between -6,000
111% and 152% more for their natural gas by 2030.
-8,000
-8,294
AK Low AK High
-10,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and AK
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 14% 15%
would result in the electric industry shutting down most (Residential) 2030 38% 49%
carbon-based generation and/or using expensive, as yet 2020 19% 71%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 72% 151%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 27% 37%
have to substitute high cost technologies, such as biomass
(Residential) 2030 111% 152%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Alaska’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
by between $461 and $639 million per year by 2020 and to Baseline
Figure 4.(Billion
Loss in2007$)
Gross State Product
$1.7 and $2 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$0.50

B illio ns o f D o lla rs
-$0.46
Alaska’s major economic sectors will be affected by -$0.64
emission caps (Figure 5).4 The current two largest sectors, -$1.00
food products manufacturing and petroleum and coal
productions manufacturing, show decreases in output of -$1.50
1.4% to 2.4% and 13.2% to 23.2%, respectively in 2020.
-$1.70
All manufacturing sectors will suffer output losses of -$2.00
-$2.01
between 2.5% and 5.9% by 2020, while output from energy AK-Low AK-High
intensive sectors fall between 9.1% and 12.8%. The general -$2.50
shift away from coal use would result in approximately a
53% reduction in coal production (Figure 6). These losses
would be significantly higher by 2030 and would have a Figure 5: Impact on Industrial Value of Shipments
lasting impact on Alaska’s economic base. Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020

0%
Impact on Low Income Families5 -2.5% -1.4%
-5% -2.4%
The impacts of L/W will be felt especially by the poor, who -4.1%
spend more of their income on energy and other goods than -10% -9.1%
other income brackets. By 2020, higher energy prices mean -15% -12.8% -13.2%
that low income families in Alaska (with average incomes
of $15,441) will spend between 16% and 18% of their -20%
income on energy under L/W compared to a projected 14% -25% -23.2%
without L/W. Others on fixed incomes, such as the elderly AK Low AK High
-30%
will also suffer disproportionately.
MAN EIS FOOD PET
6
Impact on State Budgets
The increases in Alaska’ energy costs under L/W will Figure 6: Impact on Production
Figure 6. Percent Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
0%
Alaska’s 597 schools and universities and 27 hospitals will
-10%
likely experience a 20% to 24% percent increase in
expenditures by 2020 and a 64% to 84% increase by 2030. -20%
For government entities, costs for services, including public -30%
transportation and vehicle fleets, such as school buses, will -40%
also rise under L/W. -50%
-60% -54.3% -52.7%
AK Low AK High
-70%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; FOOD = Food Products Manufacturing; PET = Petroleum and Coal Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Arizona
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could
Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3
(Thousands of Jobs)
Figure 2. Loss in Employme nt
2020 2030
Impact on Jobs 0
.

-10
Under L/W, Arizona would lose 23,067 to 34,699 jobs in
-20
2020 and 63,505 to 84,543 jobs in 2030 (Figure 2). The
Thousands of Jobs

-30 -23.07
primary cause of job losses would be lower industrial
-40 -34.70
output due to higher energy prices, the high cost of
-50
complying with required emissions cuts, and greater
-60
competition from overseas manufacturers with lower -63.50
-70
energy costs.
-80
-90 -84.53
Decrease in Disposable Household Income -100
AZ-Low AZ-High

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Arizona would see disposable household FigureFigure
3: Household Impact Relative
3. Loss of Disposable Income to Baseline
income reduced by $822 to $2,665 per year by 2020 and (Annual Dollarsper Lost per Household)
Household
$3,382 to $6,617 by 2030 (Figure 3). 0 2020 2030

-1,000
L/W’s Impact on Energy Prices -822
-2,000
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in Arizona would
D o lla r s

-3,000 -2,665
increase between 74% and 140% by 2030, while electricity -3,382
-4,000
prices would increase by 96% to 133%. Table 1 shows the
increase in electricity, gasoline, and natural gas prices faced -5,000
by a typical Arizona household compared to national -6,000
household increases. Arizona residents would pay between AZ Low AZ High -6,167
-7,000
113% and 154% more for their natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and AZ
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 23% 30%
would result in the electric industry shutting down most (Residential) 2030 96% 133%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 39%
have to substitute high cost technologies, such as biomass
(Residential) 2030 113% 154%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Arizona’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
by between $2.6 and $3.6 billion per year by 2020 and $9.6 toFigure
Baseline (Billion
4. Loss 2007$)State Product
in Gross
and $11.3 billion by 200 (Figure 4). 2020 2030
$0.00

Impact on Industry -$2.00

Billio ns o f D o lla rs
-$2.61
Arizona’s major economic sectors will be affected by -$4.00
-$3.61
emission caps (Figure 5).4 The current two largest sectors, -$6.00
computer and electronic product manufacturing and non-
metallic mineral product manufacturing, show decreases in -$8.00
output of 1.6% to 1.9% and 11.1% to 12.8%, respectively -$10.00
in 2020. All manufacturing sectors will suffer output losses -$9.61
of between 2.2% and 3.5% by 2020, while output from -$12.00 -$11.34
AZ-Low AZ-High
energy intensive sectors fall between 10.0% and 13.3%. In -$14.00
addition, the general shift away from coal would result in a
38.9% to 43.0% reduction in coal production and electricity
production would fall by 9.9% to 14.6% (Figure 6). These Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
losses would be significantly higher by 2030 and would Percentage Change from Baseline in 2020
have a lasting impact on Arizona’s economic base. 0%
-2.2% -1.9% -1.6%
Impact on Low Income Families5 -5% -3.5%

The impacts of L/W will be felt especially by the poor, who


spend more of their income on energy and other goods than -10%
-10.0%
other income brackets. By 2020, higher energy prices mean -11.1%
-13.3% -12.8%
that low income families in Arizona (with average incomes -15%
of $14,817) will spend between 17% and 19% of their AZ Low AZ High
income on energy under L/W compared to a projected 14% -20%
without L/W. Others on fixed incomes, such as the elderly MAN EIS Comp. NMP
will also suffer disproportionately.

Impact on State Budgets6


The increases in Arizona’ energy costs under L/W will Figure 6: Impact on Production
Figure 6. Percent Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
0%
Arizona’s 2,447 schools and universities and 109 hospitals
will likely experience a 20% to 24% percent increase in -10%
expenditures by 2020 and a 64% to 84% increase by 2030. -9.9%
-20% -14.6%
For government entities, costs for services, including public
transportation and vehicle fleets, such as school buses, will -30%
also rise under L/W.
-40%
-38.9%
-43.0% AZ Low AZ High
-50%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; Comp. = Computer and Electronic Product Manufacturing; NMP = Non-Metallic Mineral Product Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
Arkansas
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could
Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3
(ThousandsFigure
of Jobs)
2. Loss in Employme nt
2020 2030
Impact on Jobs 0
.

-5
Under L/W, Arkansas would lose 10,985 to 16,524 jobs in
2020 and 29,736 to 39,583 jobs in 2030 (Figure 2). The -10
Thousands of Jobs

-10.98
primary cause of job losses would be lower industrial -15
-16.52
output due to higher energy prices, the high cost of -20
complying with required emissions cuts, and greater -25
competition from overseas manufacturers with lower -30
-29.74
energy costs. -35
-40
Decrease in Disposable Household Income AR-Low AR-High -39.58
-45
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household
Figure 3. Loss Impact Relative
of Disposable to Baseline
Income
on households. Arkansas would see disposable household (Annual Dollars Lost per Household)
income reduced by $733 to $2,378 per year by 2020 and per Household
$3,088 to $5,631 by 2030 (Figure 3). 0
2020 2030

L/W’s Impact on Energy Prices -1,000 -733

Most energy prices would rise under L/W, particularly -2,000


coal, oil, and natural gas. The price of gasoline in -2,378
D o ll a r s

-3,000
Arkansas would increase between 76% and 147% by -3,088
-4,000
2030, while electricity prices would increase by 101% to
145%. Table 1 shows the increase in electricity, -5,000
gasoline, and natural gas prices faced by a typical -6,000 -5,631
Arkansas household compared to national household AR Low AR High
increases. Arkansas residents would pay between 101% -7,000
and 145% more for their natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and AR
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 32% 35%
would result in the electric industry shutting down most (Residential) 2030 101% 145%
carbon-based generation and/or using expensive, as yet 2020 21% 71%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 76% 147%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 25% 36%
have to substitute high cost technologies, such as biomass
(Residential) 2030 101% 145%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Arkansas’ gross state product Figure 4: Annual Impact of GSP Relative
Figure 4. Loss
to Baseline in Gross
(Billion State Product
2007$)
(GSP) would be between $1.1 and $1.5 billion per year by
2020 2030
2020 and $3.9 and $4.7 billion by 2030 (Figure 4). $0.00

-$1.00
Impact on Industry

B illio ns o f D o lla rs
-$1.07
Arkansas’ major economic sectors will be affected by -$2.00 -$1.49
emission caps (Figure 5).4 The current two largest sectors,
-$3.00
food products manufacturing and paper products
manufacturing, show decreases in output of 1.4% to 2.4% -$4.00
and 4.7% to 7.1%, respectively in 2020. All manufacturing -$3.95
sectors will suffer output losses of between 2.6% and 4.2% -$5.00 -$4.67
by 2020, while output from energy intensive sectors fall AR-Low AR-High
-$6.00
between 2.2% and 4.3%. In addition, the general shift away
from coal would result in a 36.1% to 37.5% reduction in
coal production and electricity production would fall by
4.1% to 6.5% (Figure 6). These losses would be Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
Percentage Change from Baseline in 2020
significantly higher by 2030 and would have a lasting
0%
impact on Arkansas’ economic base.
-2% -1.4%
Impact on Low Income Families5 -2.6% -2.2% -2.4%
The impacts of L/W will be felt especially by the poor, who -4%
-4.2% -4.3%
spend more of their income on energy and other goods than -4.7%
-6%
other income brackets. By 2020, higher energy prices mean
that low income families in Arkansas (with average -8% -7.1%
incomes of $10,918) will spend between 25% and 27% of AR Low AR High
their income on energy under L/W compared to a projected -10%
21% without L/W. Others on fixed incomes, such as the Man EII
EIS FOOD PAP
elderly will also suffer disproportionately.
Figure 6: Impact on Production
Impact on State Budgets6 Figure 6. Percent Change in Production by
Percentage Change from Baseline in 2020
Sector in 2020
The increases in Arkansas’ energy costs under L/W will 0%
impact expenditures throughout the state. Specifically, -4.1%
-6.5%
-10%
Arkansas’ 1,376 schools and universities and 110 hospitals
will likely experience a 28% to 35% percent increase in -20%
expenditures by 2020 and a 91% to 123% increase by 2030.
For government entities, costs for services, including public -30%
transportation and vehicle fleets, such as school buses, will -40% -36.1%
-37.5%
also rise under L/W. AR Low AR High
-50%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; FOOD = Food products manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
California
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)
2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-50
Under L/W, California would lose 129,982 to 195,528 jobs -100
Thousands of Jobs

in 2020 and 337,863 to 449,745 jobs in 2030 (Figure 2). -150 -129.98
The primary cause of job losses would be lower industrial -200
-195.53
output due to higher energy prices, the high cost of -250
complying with required emissions cuts, and greater -300
competition from overseas manufacturers with lower -350 -337.86
energy costs. -400
-450
CA-Low CA-High -449.75
Decrease in Disposable Household Income -500
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. California would see disposable household
Figure 3: Household Impact
Figure 3. Loss Relative to
of Disposable Baseline
Income
income reduced by $1,244 to $4,032 per year by 2020 and
(Annual Dollars Lost per Household)
$5,163 to $9,414 by 2030 (Figure 3). per Household
0
2020 2030
L/W’s Impact on Energy Prices
-2,000 -1,244
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in California -4,000
would increase between 72% and 151% by 2030, while -4,032
D o lla r s

electricity prices would increase by 38% to 49%. Table 1 -6,000 -5,163

shows the increase in electricity, gasoline, and natural gas


-8,000
prices faced by a typical California household compared to
national household increases. California residents would -10,000 -9,414
pay between 111% and 152% more for their natural gas by CA Low CA High
2030. -12,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and CA
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 14% 15%
would result in the electric industry shutting down most (Residential) 2030 38% 49%
carbon-based generation and/or using expensive, as yet 2020 19% 71%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 72% 151%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 27% 37%
have to substitute high cost technologies, such as biomass
(Residential) 2030 111% 152%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output Figure 4.
to Baseline Loss in2007$)
(Billion Gross State Product
are estimated to US reduce California’s gross state product 2020 2030
$0.00
(GSP) by between $20 and $27.7 billion per year by 2020
-$10.00
and $73.6 and $86.9 billion by 2030 (Figure 4).
-$20.00

B illio ns o f D o lla rs
-$30.00 -$19.96
Impact on Industry -$27.66
-$40.00
California’s major economic sectors will be affected by -$50.00
emission caps (Figure 5).4 The current two largest sectors, -$60.00
chemical manufacturing and computer and electronic -$70.00
product manufacturing, show decreases in output of 5.9% -$80.00 -$73.60
to 6.6% and 2.0% to 1.6%, respectively in 2020. All -$90.00 CA-Low CA-High -$86.90
manufacturing sectors will suffer output losses of between -$100.00
2.5% and 4.1% by 2020, while output from energy
intensive sectors fall between 9.1% and 12.8%. These
losses would be significantly higher by 2030 and would Figure 5: Impact on Industrial Value of Shipments
have a lasting impact on California’s economic base. Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020

Emphasis on non-fossil fuel generation in California would 0%


result in a 6.2% to 13.1% increase in electricity generation
-2.5% -2.0% -1.6%
(Figure 6). -5% -4.1%
-5.9%
-6.6%
Impact on Low Income Families5 -10% -9.1%
The impacts of L/W will be felt especially by the poor, who
spend more of their income on energy and other goods than -15%
-12.8%
other income brackets. By 2020, higher energy prices mean
CA Low CA High
that low income families in California (with average -20%
incomes of $17,312) will spend between 14% and 16% of
MAN EIS CHEM COMP
their income on energy under L/W compared to a projected
12% without L/W. Others on fixed incomes, such as the Figure 6: Impact on Production
Figure 6. Percent Change in Production by
elderly will also suffer disproportionately. Percentage Change from
Sector Baseline in 2020
in 2020
20%
Impact on State Budgets6
The increases in California’s energy costs under L/W will 15% 13.1%
impact expenditures throughout the state. Specifically,
California’s 13,652 schools and universities and 473 10%
hospitals will likely experience a 20% to 24% percent 6.2%
increase in expenditures by 2020 and a 64% to 84% 5%
increase by 2030. For government entities, costs for CA Low CA High
services, including public transportation and vehicle fleets, 0%
such as school buses, will also rise under L/W. Coal Electricity

4
MAN = Manufacturing; EIS = Energy Intensive Industry; CHEM = Chemical manufacturing; COMP = Computer and electronic product manufacturing
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Colorado
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs) 2. Loss in Employment
Figure
2020 2030
. 0
Impact on Jobs -10
Under L/W, Colorado would lose 20,775 to 31,252 jobs in -20
Thousands of Jobs

-20.78
2020 and 57,195 to 76,135 jobs in 2030 (Figure 2). The -30
-31.25
primary cause of job losses would be lower industrial -40
output due to higher energy prices, the high cost of -50
complying with required emissions cuts, and greater -60 -57.19
competition from overseas manufacturers with lower
-70
energy costs.
-80 -76.13
CO-Low CO-High
-90
Decrease in Disposable Household Income
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Colorado would see disposable household (AnnualFigure 3. Loss
Dollars Lostofper
Disposable Income
Household)
income reduced by $977 to $3,167 per year by 2020 and per Household
$4,019 to $7,328 by 2030 (Figure 3). 0
2020 2030
-1,000
L/W’s Impact on Energy Prices -977
-2,000
Most energy prices would rise under L/W, particularly coal, -3,000
oil, and natural gas. The price of gasoline in Colorado -3,167
D ollars

-4,000
would increase between 74% and 140% by 2030, while -4,019
-5,000
electricity prices would increase by 96% to 133%. Table 1
shows the increase in electricity, gasoline, and natural gas -6,000
prices faced by a typical Colorado household compared to -7,000
national household increases. Colorado residents would pay -8,000 -7,328
CO Low CO High
between 113% and 154% more for their natural gas by -9,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and CO
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 23% 30%
would result in the electric industry shutting down most (Residential) 2030 96% 133%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 39%
have to substitute high cost technologies, such as biomass
(Residential) 2030 113% 154%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Colorado’s gross state product Figure 4: Annual Impact of GSP Relative
Figure
to 4. Loss
Baseline in Gross
(Billion 2007$)State Product
(GSP) by between $2.7 and $3.7 billion per year by 2020
2020 2030
and $9.8 and $11.6 billion by 2030 (Figure 4). $0.00

-$2.00
Impact on Industry

Billions of Dollars
-$4.00 -$2.66
Colorado’s major economic sectors will be affected by -$3.68
emission caps (Figure 5).4 The current two largest sectors, -$6.00
chemical manufacturing and computer and electronic -$8.00
product manufacturing, show decreases in output of 6.2%
to 7.1% and 1.6% to 1.9%, respectively in 2020. All -$10.00
-$9.80
manufacturing sectors will suffer output losses of between -$12.00 -$11.57
2.2% and 3.5% by 2020, while output from energy CO-Low CO-High
-$14.00
intensive sectors fall between 10.0% and 13.3%. In
addition, the general shift away from coal would result in a
38.9% to 43.0% reduction in coal production and electricity
production would fall by 9.9% to 14.6% (Figure 6). These Figure 5: Impact on Industrial Value of Shipments
losses would be significantly higher by 2030 and would Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020
have a lasting impact on Colorado’s economic base. 0%
-2.2% -1.9% -1.6%
Impact on Low Income Families5 -5% -3.5%
The impacts of L/W will be felt especially by the poor, who -6.2%
-7.1%
spend more of their income on energy and other goods than -10%
other income brackets. By 2020, higher energy prices mean -10.0%
that low income families in Colorado (with average -15% -13.3%
incomes of $15,285) will spend between 16% and 18% of
their income on energy under L/W compared to a projected CO Low CO High
14% without L/W. Others on fixed incomes, such as the -20%
elderly will also suffer disproportionately. MAN EIS CHEM COMP

Impact on State Budgets6 Figure 6: Impact on Production


Figure 6. Percent Change in Production by
The increases in Colorado’ energy costs under L/W will Percentage Change from Baseline in 2020
Sector in 2020
impact expenditures throughout the state. Specifically, 0%
Colorado’s 2,133 schools and universities and 105 hospitals
-10%
will likely experience a 20% to 24% percent increase in -9.9%
expenditures by 2020 and a 64% to 84% increase by 2030. -20% -14.6%
For government entities, costs for services, including public
-30%
transportation and vehicle fleets, such as school buses, will
also rise under L/W. -40%
-38.9%
-43.0% CO Low CO High
-50%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; COMP = Computer and electronic product manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Connecticut
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs) 2. Loss in Employment
Figure
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Connecticut would lose 13,643 to 20,523 jobs -10
Thousands of Jobs

in 2020 and 33,367 to 44,416 jobs in 2030 (Figure 2). The -15 -13.64
primary cause of job losses would be lower industrial -20
-20.52
output due to higher energy prices, the high cost of -25
complying with required emissions cuts, and greater -30
competition from overseas manufacturers with lower -35 -33.37
energy costs. -40
-45
CT-Low CT-High -44.42
Decrease in Disposable Household Income -50
Higher energy prices would have ripple impacts on prices Figure 3: Household Impact Relative to Baseline
throughout the economy and would impose a financial cost FigureLost
(Annual Dollars 3. Loss
perofHousehold)
Disposable Income
on households. Connecticut would see disposable per Household
household income reduced by $1,472 to $4,774 per year by 2020 2030
0
2020 and $6,417 to $11,701 by 2030 (Figure 3).
-2,000 -1,472
L/W’s Impact on Energy Prices -4,000
Most energy prices would rise under L/W, particularly coal, -4,774
Dollars

-6,000
oil, and natural gas. The price of gasoline in Connecticut -6,417
would increase between 74% and 144% by 2030, while -8,000
electricity prices would increase by 54% to 81%. Table 1 -10,000
shows the increase in electricity, gasoline, and natural gas
prices faced by a typical Connecticut household compared -12,000 -11,701
to national household increases. Connecticut residents CT Low CT High
-14,000
would pay between 86% and 121% more for their natural
gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and CT
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 18% 22%
would result in the electric industry shutting down most (Residential) 2030 54% 81%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 20% 28%
have to substitute high cost technologies, such as biomass
(Residential) 2030 86% 121%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output Figure 4.
to Baseline Loss in2007$)
(Billion Gross State Product
are estimated to reduce Connecticut’s gross state product 2020 2030
$0.00
(GSP) would be between $2.4 and $3.3 billion per year by
2020 and $8.9 and $10.5 billion by 2030 (Figure 4). -$2.00

B illio ns o f D o lla rs
-$2.41
Impact on Industry -$4.00 -$3.34
Connecticut’s major economic sectors will be affected by -$6.00
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and transportation equipment -$8.00
manufacturing, show decreases in output of 6.1% to 6.8% -$8.88
-$10.00
and 6.5% to 14.0 %, respectively in 2020. All CT-Low CT-High -$10.48
manufacturing sectors will suffer output losses of between -$12.00
2.9% and 4.0% by 2020, while output from energy
intensive sectors fall between 8.0 % and 9.9%. Electricity
production would fall by between 9.2% and 12.0% (Figure Figure 5: Impact on Industrial Value of Shipments
6). These losses would be significantly higher by 2030 and Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020
would have a lasting impact on Connecticut’s economic 0%
base.
-2.9%
5
-5% -4.0%
Impact on Low Income Families -6.1% -6.5%
-6.8%
The impacts of L/W will be felt especially by the poor, who -8.0%
-10%
-9.9%
spend more of their income on energy and other goods than
other income brackets. By 2020, higher energy prices mean -15% -14.0%
that low income families in Connecticut (with average
CT Low CT High
incomes of $21,523) will spend between 16% and 18% of -20%
their income on energy under L/W compared to a projected
MAN EIS CHEM TRAN
13% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately.
Figure 6: Impact on Production
Impact on State Budgets6 Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
The increases in Connecticut’s energy costs under L/W will Sector in 2020
0%
impact expenditures throughout the state. Specifically,
Connecticut’s 1,518 schools and universities and 50 -5%
hospitals will likely experience a 28% to 38% percent
increase in expenditures by 2020 and an 88% to 127% -10% -9.2%
increase by 2030. For government entities, costs for -12.0%
services, including public transportation and vehicle fleets, -15%
such as school buses, will also rise under L/W.
CT Low CT High
-20%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; TRAN = Transportation equipment manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Delaware
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could
increase to between $227/MT and $271/MT by 2030.3 Figure 2: Loss in Employment Relative to Baseline
(ThousandsFigure
of Jobs)2. Loss in Employment
Impact on Jobs 2020 2030
0
Under L/W, Delaware would lose 3,953 to 5,946 jobs in
.

-2
2020 and 11,155 to 14,848 jobs in 2030 (Figure 2). The
-4
primary cause of job losses would be lower industrial -3.95
Thousands of Jobs

output due to higher energy prices, the high cost of -6


-5.95
complying with required emissions cuts, and greater -8
competition from overseas manufacturers with lower -10
energy costs. -12 -11.15

-14
Decrease in Disposable Household Income
-16 -14.85
Higher energy prices would have ripple impacts on prices DE-Low DE-High
-18
throughout the economy and would impose a financial cost
on households. Delaware would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $1,003 to $3,250 per year by 2020 and Figure 3.Lost
(Annual Dollars Lossper
of Disposable
Household)Income
$4,226 to $7,705 by 2030 (Figure 3). per Household
2020 2030
0
L/W’s Impact on Energy Prices
-1,003
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Delaware
would increase between 74% and 145% by 2030, while -4,000 -3,250
D o lla r s

-4,226
electricity prices would increase by 103% to 135%. Table 1
shows the increase in electricity, gasoline, and natural gas -6,000
prices faced by a typical Delaware household compared to
national household increases. Delaware residents would -8,000 -7,705
pay between 91% and 131% more for their natural gas by DE Low DE High
2030. -10,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
DE
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 30% 39%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 103% 135%
unproven technology, to capture and store CO2. To meet 2020 21% 70%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 145%
have to substitute high cost technologies, such as biomass Natural Gas 2020 23% 32%
and wind, for conventional generation. (Residential) 2030 91% 131%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Delaware’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $691 and $958 million per year by 2020 to Baseline
Figure 4.(Billion
Loss in2007$)
Gross State Product
and $2.5 and $3 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$0.50

B illio ns o f D o lla r s
Delaware’s major economic sectors will be affected by -$1.00 -$0.69
emission caps (Figure 5).4 The current two largest sectors, -$0.96
-$1.50
chemical manufacturing and food products manufacturing,
show decreases in output of 7.2% to 8.2% and 1.6% to -$2.00
2.4%, respectively in 2020. All manufacturing sectors will -$2.50
suffer output losses of between 3.2% and 4.4% by 2020, -$2.55
while output from energy intensive sectors fall between -$3.00
-$3.01
DE-Low DE-High
7.8% and 9.1%. Electricity production would fall by -$3.50
between 0.4% and 1.6%. These losses would be
significantly higher by 2030 and would have a lasting
impact on Delaware’s economic base.
Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
Impact on Low Income Families5 Percentage Change from Baseline in 2020
The impacts of L/W will be felt especially by the poor, who 0%
spend more of their income on energy and other goods than -1.6% -2.4%
other income brackets. By 2020, higher energy prices mean -3%
-3.2%
that low income families in Delaware (with average -6% -4.4%
incomes of $12,945) will spend between 20% and 22% of
-7.2%
their income on energy under L/W compared to a projected -9% -7.8% -8.2%
17% without L/W. Others on fixed incomes, such as the -9.1%

elderly will also suffer disproportionately. -12%


DE Low DE High
6 -15%
Impact on State Budgets
MAN EIS CHEM FOOD
The increases in Delaware’s energy costs under L/W will
impact expenditures throughout the state. Specifically,
Delaware’s 360 schools and universities and 13 hospitals Figure
Figure6:6.Impact onChange
Percent Production
in Production by
will likely experience a 28% to 35% percent increase in Percentage Change from Baseline in 2020
Sector in 2020
0.0%
expenditures by 2020 and a 91% to 123% increase by 2030.
For government entities, costs for services, including public -0.4%
-0.5%
transportation and vehicle fleets, such as school buses, will
also rise under L/W.
-1.0%

-1.5%
-1.6%
DE Low DE High
-2.0%
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; FOOD = Paper Coal products manufacturing. Electricity
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Florida
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-50
Under L/W, Florida would lose 78,172 to 117,593 jobs in
-78.17
Thousands of Jobs

2020 and 220,586 to 293,632 jobs in 2030 (Figure 2). The -100

primary cause of job losses would be lower industrial -150


-117.59

output due to higher energy prices, the high cost of


complying with required emissions cuts, and greater -200

competition from overseas manufacturers with lower -250


-220.59

energy costs.
-300
-293.63
FL-Low FL-High
Decrease in Disposable Household Income -350
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Florida would see disposable household
Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
income reduced by $918 to $2,976 per year by 2020 and
(Annual Dollars Lost per Household)
per Household
$3,868 to $7,053 by 2030 (Figure 3).
2020 2030
0
L/W’s Impact on Energy Prices
-1,000 -918
Most energy prices would rise under L/W, particularly coal,
-2,000
oil, and natural gas. The price of gasoline in Florida would
increase between 74% and 145% by 2030, while electricity -3,000
D ollars

-2,976
prices would increase by 103% to 135%. Table 1 shows the -4,000 -3,868
increase in electricity, gasoline, and natural gas prices faced -5,000
by a typical Florida household compared to national
-6,000
household increases. Florida residents would pay between
-7,000
91% and 131% more for their natural gas by 2030. FL Low FL High -7,053
-8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and FL
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 30% 39%
would result in the electric industry shutting down most (Residential) 2030 103% 135%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 145%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 23% 32%
have to substitute high cost technologies, such as biomass
(Residential) 2030 91% 131%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output toFigure
Baseline (Billion
4. Loss 2007$)
in Gross State Product
are estimated to reduce Florida’s gross state product (GSP) 2020 2030
by between $8 and $11.2 billion per year by 2020 and $0.00
$29.7 and $35.1 billion by 2030 (Figure 4). -$5.00

Billio ns o f D o lla rs
-$10.00 -$8.05
Impact on Industry -$15.00 -$11.16
Florida’s major economic sectors will be affected by -$20.00
emission caps (Figure 5).4 The current two largest sectors, -$25.00
food products manufacturing and non-metal mineral
-$30.00
products manufacturing, show decreases in output of 1.6% -$29.70
to 2.4% and 7.8% to 8.4%, respectively in 2020. All -$35.00
FL-Low FL-High -$35.07
manufacturing sectors will suffer output losses of between -$40.00
3.2% and 4.4% by 2020, while output from energy
intensive sectors fall between 7.8% and 9.1%. Electricity
production would fall by between 6.2% and 8.0% (Figure Figure 5: Impact on Industrial Value of Shipments
6). These losses would be significantly higher by 2030 and Percentage
Figure Change
5. Percent Changefrom Baseline
in Output in 2020
by Industry in 2020

would have a lasting impact on Florida’s economic base. 0%


-1.6%
Impact on Low Income Families5 -3% -2.4%
-3.2%
The impacts of L/W will be felt especially by the poor, who -6% -4.4%
spend more of their income on energy and other goods than
-7.8% -7.8%
other income brackets. By 2020, higher energy prices mean -9% -8.4%
-9.1%
that low income families in Florida (with average incomes
of $14,349) will spend between 18% and 20% of their -12%
FL Low FL High
income on energy under L/W compared to a projected 15% -15%
without L/W. Others on fixed incomes, such as the elderly
MAN EIS FOOD MIN
will also suffer disproportionately.
Figure 6: Impact on Production
Figure 6. Percent Change in Production by
Impact on State Budgets6 Percentage Change from
Sector Baseline in 2020
in 2020
The increases in Florida’s energy costs under L/W will 0%
impact expenditures throughout the state. Specifically, -2%
Florida’s 5,743 schools and universities and 289 hospitals
will likely experience a 28% to 35% percent increase in -4%
expenditures by 2020 and a 91% to 123% increase by 2030.
-6%
For government entities, costs for services, including public -6.2%
transportation and vehicle fleets, such as school buses, will -8%
-8.0%
also rise under L/W. FL Low FL High
-10%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; FOOD = Food products manufacturing; MIN = Non-metal mineral products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Georgia
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-20
Under L/W, Georgia would lose 41,358 to 62,213 jobs in -40
Thousands of Jobs

2020 and 116,703 to 155,349 jobs in 2030 (Figure 2). The -60
-41.36

primary cause of job losses would be lower industrial -62.21


-80
output due to higher energy prices, the high cost of
-100
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -120
-116.70
energy costs. -140
-160 -155.35
GA-Low GA-High
Decrease in Disposable Household Income -180
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Georgia would see disposable household (AnnualFigure 3. Loss
Dollars Lostofper
Disposable Income
Household)
income reduced by $941 to $3,051 per year by 2020 and per Household
$3,966 to $7,231 by 2030 (Figure 3). 2020 2030
0
-1,000
L/W’s Impact on Energy Prices -941
-2,000
Most energy prices would rise under L/W, particularly coal, -3,000
oil, and natural gas. The price of gasoline in Georgia would -3,051
D o lla r s

-4,000
increase between 74% and 145% by 2030, while electricity -3,966
-5,000
prices would increase by 103% to 135%. Table 1 shows the
increase in electricity, gasoline and natural gas prices faced -6,000

by a typical Georgia household compared to national -7,000


-8,000 -7,231
household increases. Georgia residents would pay between GA Low GA High
91% and 131% more for their natural gas by 2030. -9,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
GA
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 30% 39%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 103% 135%
unproven technology, to capture and store CO2. To meet 2020 21% 70%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 145%
have to substitute high cost technologies, such as biomass Natural Gas 2020 23% 32%
and wind, for conventional generation. (Residential) 2030 91% 131%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Georgia’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
Figure 4. (Billion
to Baseline Loss in 2007$)
Gross State Product
by between $4.5 and $6.2 billion per year by 2020 and
2020 2030
$16.4 and $19.4 billion by 2030 (Figure 4). $0.00

Impact on Industry -$5.00

B illio ns o f D o lla rs
-$4.46
Georgia’s major economic sectors will be affected by -$6.18
emission caps (Figure 5).4 The current two largest sectors, -$10.00

food products manufacturing and paper manufacturing,


-$15.00
show decreases in output of 1.6% to 2.4% and 5.2% to
7.1%, respectively in 2020. All manufacturing sectors will -$16.45
-$20.00 -$19.42
suffer output losses of between 3.2% and 4.4% by 2020,
while output from energy intensive sectors fall between GA-Low GA-High
-$25.00
7.8% and 9.1%. These losses would be significantly higher
by 2030 and would have a lasting impact on Georgia’s
economic base. Emphasis on non-fossil fuel generation in
Georgia would result in a 0.9% to 1.5% increase in Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
electricity generation (Figure 6). Percentage Change from Baseline in 2020
0%
5 -1.6%
Impact on Low Income Families -2.4%
-5% -3.2%
The impacts of L/W will be felt especially by the poor, who -4.4% -5.2%
spend more of their income on energy and other goods than -7.8% -7.1%
other income brackets. By 2020, higher energy prices mean -10% -9.1%
that low income families in Georgia (with average incomes
of $14,193) will spend between 18% and 20% of their -15%
income on energy under L/W compared to a projected 16% GA Low GA High
without L/W. Others on fixed incomes, such as the elderly -20%
will also suffer disproportionately. MAN EIS FOOD PAP

Impact on State Budgets6


The increases in Georgia’s energy costs under L/W will Figure 6: Impact on Production
Figure 6. Percent Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
Georgia’s 3,288 schools and universities and 190 hospitals 2.0%
will likely experience a 28% to 35% percent increase in 1.5%
expenditures by 2020 and a 91% to 123% increase by 2030. 1.5%
For government entities, costs for services, including public
transportation and vehicle fleets, such as school buses, will 1.0% 0.9%

also rise under L/W.


0.5%
GA Low GA High
0.0%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; FOOD = Food products manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Hawaii
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-2
Under L/W, Hawaii would lose 4,738 to 7,127 jobs in 2020 -4
Thousands of Jobs

and 12,314 to 16,392 jobs in 2030 (Figure 2). The primary -6 -4.74
cause of job losses would be lower industrial output due to
-8 -7.13
higher energy prices, the high cost of complying with
-10
required emissions cuts, and greater competition from
overseas manufacturers with lower energy costs. -12
-12.31
-14
Decrease in Disposable Household Income -16
HI-Low HI-High -16.39
Higher energy prices would have ripple impacts on prices -18
throughout the economy and would impose a financial cost
on households. Hawaii would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $1,090 to $3,532 per year by 2020 and Figure 3.Lost
(Annual Dollars Lossper
of Disposable
Household)Income
$4,524 to $8,249 by 2030 (Figure 3). per Household
2020 2030
0
L/W’s Impact on Energy Prices
-1,000
Most energy prices would rise under L/W, particularly coal, -2,000 -1,090
oil, and natural gas. The price of gasoline in Hawaii would -3,000
increase between 74% and 144% by 2030, while electricity -4,000
D o lla r s

-3,532
prices would increase by 122% to 159%. Table 1 shows the -5,000 -4,524
increase in electricity, gasoline and natural gas prices faced -6,000
by a typical Hawaii household compared to national -7,000
household increases. Hawaii residents would pay between -8,000
99% and 142% more for their natural gas by 2030. -9,000
HI Low HI High
-8,249
-10,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and HI
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 32% 40%
would result in the electric industry shutting down most (Residential) 2030 122% 159%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 25% 35%
have to substitute high cost technologies, such as biomass
(Residential) 2030 99% 142%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Hawaii’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
by between $666 and $923 million per year by 2020 and to Baseline
Figure (Billion 2007$)
4. Loss in Gross State Product
$2.5 and $2.9 billion by 2030 (Figure 4). 2020 2030
$0.00

-$0.50
Impact on Industry

Billio ns o f D o lla rs
-$1.00 -$0.67
Hawaii’s major economic sectors will be affected by -$0.92
emission caps (Figure 5).4 The current two largest sectors, -$1.50
food products manufacturing and petroleum and coal -$2.00
products manufacturing, show decreases in output of 1.4%
to 2.4% and 13.2% to 23.2%, respectively in 2020. All -$2.50
-$2.46
manufacturing sectors will suffer output losses of between -$3.00 -$2.90
Hi-Low HI-High
2.5% and 4.1% by 2020, while output from energy -$3.50
intensive sectors fall between 9.1% and 12.8%. These
continued losses will have a lasting effect on the economic
base of Hawaii.
Figure 5: Impact on Industrial Value of Shipments
Impact on Low Income Families 5 Percentage Change from Baseline in 2020
Figure 5. Percent Change in Output by Industry in 2020
The impacts of L/W will be felt especially by the poor, who 0%
spend more of their income on energy and other goods than -2.5% -1.4%
-5% -2.4%
other income brackets. By 2020, higher energy prices mean -4.1%
that low income families in Hawaii (with average incomes -10% -9.1%
of $13,101) will spend between 18% and 21% of their
income on energy under L/W compared to a projected 16% -15% -12.8% -13.2%
without L/W. Others on fixed incomes, such as the elderly -20%
will also suffer disproportionately.
-25% -23.2%
6 HI Low HI High
Impact on State Budgets -30%
The increases in Hawaii’s energy costs under L/W will MAN EIS FOOD PET
impact expenditures throughout the state. Specifically,
Hawaii’s 441 schools and universities and 29 hospitals will
likely experience a 20% to 24% percent increase in
expenditures by 2020 and a 64% to 84% increase by 2030.
For government entities, costs for services, including public
transportation and vehicle fleets, such as school buses, will
also rise under L/W.

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; FOOD = Food products manufacturing; PET = Petroleum and coal products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Idaho
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

Under L/W, Idaho would lose 5,879 to 8,843 jobs in 2020 -5


Thousands of Jobs

and 16,184 to 21,543 jobs in 2030 (Figure 2). The primary -5.88

cause of job losses would be lower industrial output due to -10 -8.84

higher energy prices, the high cost of complying with


required emissions cuts, and greater competition from -15
overseas manufacturers with lower energy costs. -16.18

-20
Decrease in Disposable Household Income -21.54
ID-Low ID-High
Higher energy prices would have ripple impacts on prices -25
throughout the economy and would impose a financial cost
on households. Idaho would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $789 to $2,558 per year by 2020 and Figure
(Annual Dollars 3. Loss
Lost per of Disposable Income
Household)
$3,247 to $5,920 by 2030 (Figure 3). per Household
2020 2030
0
L/W’s Impact on Energy Prices
-1,000 -789
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in Idaho would -2,000
increase between 74% and 140% by 2030, while electricity
D ollars

-3,000 -2,558
prices would increase by 96% to 133%. Table 1 shows the -3,247
increase in electricity, gasoline and natural gas prices faced -4,000
by a typical Idaho household compared to national -5,000
household increases. Idaho residents would pay between
-6,000
113% and 154% more for their natural gas by 2030. -5,920
ID Low ID High
-7,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
ID
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 23% 30%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 96% 133%
unproven technology, to capture and store CO2. To meet 2020 20% 67%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 140%
have to substitute high cost technologies, such as biomass Natural Gas 2020 28% 39%
and wind, for conventional generation. (Residential) 2030 113% 154%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Idaho’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
by between $560 and $776 million per year by 2020 and to Baseline (Billion
Figure 4. Loss in2007$)
Gross State Product
$2.1 and $2.4 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$0.50

Billio ns o f D o lla rs
Idaho’s major economic sectors will be affected by -$0.56
-$1.00 -$0.78
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and computer and electronics -$1.50
manufacturing, show decreases in output of 6.2% to 7.1%
-$2.00
and 1.6% to 1.9%, respectively in 2020. All manufacturing -$2.06
sectors will suffer output losses of between 2.2% and 3.5% -$2.50
-$2.44
by 2020, while output from energy intensive sectors fall ID-Low ID-High
-$3.00
between 10.0% and 13.3%. Electricity production would
fall by between 2.1% and 3.5% (Figure 6). These losses
would be significantly higher by 2030 and would have a
lasting impact on Idaho’s economic base. Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
Percentage Change from Baseline in 2020
Impact on Low Income Families5 0%
-1.6%
The impacts of L/W will be felt especially by the poor, who -2.2% -1.9%
-5% -3.5%
spend more of their income on energy and other goods than
other income brackets. By 2020, higher energy prices mean -6.2% -7.1%
that low income families in Idaho (with average incomes of -10%
-10.0%
$13,101) will spend between 19% and 21% of their income
-15% -13.3%
on energy under L/W compared to a projected 16% without
L/W. Others on fixed incomes, such as the elderly will also ID Low ID High
suffer disproportionately. -20%
MAN EIS CHEM COMP
Impact on State Budgets6
Figure 6: Impact on Production
The increases in Idaho’s energy costs under L/W will Figure 6. Percent Change in Production by
Percentage Change from Baseline in 2020
impact expenditures throughout the state. Specifically, Sector in 2020
0%
Idaho’s 838 schools and universities and 52 hospitals will
likely experience a 20% to 24% percent increase in -1%
expenditures by 2020 and a 64% to 84% increase by 2030.
-2%
For government entities, costs for services, including public -2.1%
transportation and vehicle fleets, such as school buses, will -3%
also rise under L/W.
-4% -3.5%
ID Low ID High
-5%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; COMP = Computer and electronic products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Illinois
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands ofFigure
Jobs) 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-20
Under L/W, Illinois would lose 48,189 to 72,489 jobs in -40
Thousands of Jobs

2020 and 117,881 to 156,917 jobs in 2030 (Figure 2). The -60 -48.19
primary cause of job losses would be lower industrial
-80 -72.49
output due to higher energy prices, the high cost of
-100
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -120
-117.88
energy costs. -140

-160
IL-Low IL-High -156.92
Decrease in Disposable Household Income -180
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Illinois would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $1,116 to $3,617 per year by 2020 and Figure 3.Lost
(Annual Dollars Lossper
of Disposable
Household)Income
$4,625 to $8,434 by 2030 (Figure 3). per Household
0
2020 2030
L/W’s Impact on Energy Prices -1,000
-1,116
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Illinois would -3,000
increase between 72% and 141% by 2030, while electricity -4,000
D o lla r s

-3,617
prices would increase by 126% to 177%. Table 1 shows the -5,000 -4,625
increase in electricity, gasoline, and natural gas prices faced -6,000
by a typical Illinois household compared to national -7,000
household increases. Illinois residents would pay between -8,000
112% and 160% more for their natural gas by 2030. -9,000 -8,434
IL Low IL High
-10,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
IL
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 31% 38%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 126% 177%
unproven technology, to capture and store CO2. To meet 2020 20% 68%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 72% 141%
have to substitute high cost technologies, such as biomass Natural Gas 2020 29% 40%
and wind, for conventional generation. (Residential) 2030 112% 160%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Illinois’ gross state product (GSP) Figure 4: Annual Impact of GSP Relative
by between $7 and $9.7 billion per year by 2020 and $25.9 to Baseline
Figure 4.(Billion
Loss in2007$)
Gross State Product
and $30.6 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$5.00

Billio ns o f D o lla rs
Illinois’ major economic sectors will be affected by -$10.00 -$7.02
-$9.73
emission caps (Figure 5).4 The current two largest -$15.00
sectors, chemical manufacturing and machinery
-$20.00
manufacturing, show decreases in output of 4.9% to
5.4% and 4.8% to 5.3%, respectively in 2020. All -$25.00
-$25.90
manufacturing sectors will suffer output losses of -$30.00
IL-Low IL-High -$30.59
between 4.0% and 7.3% by 2020, while output from -$35.00
energy intensive sectors fall between 6.8% and 8.6%. In
addition the general shift away from coal would result in a
44.2% to 47.6% reduction in coal production and electricity Figure 5: Impact on Industrial Value of Shipments
production would fall by 18.1% to 22.3% (Figure 6). These Figure 5. Percent Change in Output by Industry in 2020
Percentage Change from Baseline in 2020
losses would be significantly higher by 2030 and would 0%
have a lasting impact on Illinois’ economic base.
-3%
Impact on Low Income Families5 -4.0% -4.9%
-6% -4.8%
-5.4% -5.3%
The impacts of L/W will be felt especially by the poor, who -6.8%
spend more of their income on energy and other goods than -7.3%
-9% -8.6%
other income brackets. By 2020, higher energy prices mean
that low income families in Illinois (with average incomes -12%
of $13,881) will spend between 20% and 22% of their IL Low IL High
-15%
income on energy under L/W compared to a projected 17%
MAN EIS CHEM MACH
without L/W. Others on fixed incomes, such as the elderly
will also suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact on Production


Figure 6. Percent Change in Production by
Percentage Change from Baseline in 2020
The increases in Illinois’ energy costs under L/W will Sector in 2020
0%
impact expenditures throughout the state. Specifically,
Illinois’ 5,955 schools and universities and 227 hospitals -10%
will likely experience a 31% to 39% percent increase in -20% -18.1%
expenditures by 2020 and a 107% to 146% increase by -22.3%
-30%
2030. For government entities, costs for services, including
public transportation and vehicle fleets, such as school -40%
buses, will also rise under L/W. -50% -44.2%
-47.6%
IL Low IL High
-60%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical products manufacturing; MACH = Machinery manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Indiana
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Indiana would lose 24,123 to 36,288 jobs in -20
Thousands of Jobs

2020 and 59,011 to 78,553 jobs in 2030 (Figure 2). The -30 -24.12
primary cause of job losses would be lower industrial
-40 -36.29
output due to higher energy prices, the high cost of
-50
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -60
-59.01
energy costs. -70
-80
-78.55
IN-Low IN-High
Decrease in Disposable Household Income -90
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Indiana would see disposable household Figure 3.Lost
(Annual Dollars Lossper
of Disposable
Household) Income
income reduced by $899 to $2,916 per year by 2020 and per Household
$3,728 to $6,798 by 2030 (Figure 3). 2020 2030
0

L/W’s Impact on Energy Prices -1,000 -899

Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Indiana would -3,000
D ollars

-2,916
increase between 72% and 141% by 2030, while electricity -4,000 -3,728
prices would increase by 126% to 177%. Table 1 shows the -5,000
increase in electricity, gasoline, and natural gas prices faced
-6,000
by a typical Indiana household compared to national
household increases. Indiana residents would pay between -7,000 -6,798
IN Low IN High
112% and 160% more for their natural gas by 2030. -8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and IN
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 38%
would result in the electric industry shutting down most (Residential) 2030 126% 177%
carbon-based generation and/or using expensive, as yet 2020 20% 68%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 72% 141%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 29% 40%
have to substitute high cost technologies, such as biomass
(Residential) 2030 112% 160%
and wind, for conventional generation.

Energy Costs: Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Indiana’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
Figure 4.(Billion
to Baseline Loss in2007$)
Gross State Product
by between $3 and $4.1 billion per year by 2020 and $11
2020 2030
and $13 billion by 2030 (Figure 4). $0.00
-$2.00
Impact on Industry

B illio ns o f D o lla r s
-$4.00 -$2.98
Indiana’s major economic sectors will be affected by -$4.13
-$6.00
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and transportation equipment -$8.00
manufacturing, show decreases in output of 4.9% to 5.4% -$10.00
and 6.2% to 13.8%, respectively in 2020. All -$12.00 -$10.99
manufacturing sectors will suffer output losses of between -$14.00 -$12.97
4.0% and 7.3% by 2020, while output from energy IN-Low IN-High
-$16.00
intensive sectors fall between 6.8% and 8.6%. In addition,
the general shift away from coal would result in a 44.2% to
47.6% reduction in coal production and electricity
production would fall by 17.6% to 18.7% (Figure 6). These Figure 5: Impact on Industrial Value of Shipments
losses would be significantly higher by 2030 and would Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020

have a lasting impact on Indiana’s economic base. 0%

Impact on Low Income Families5 -5% -4.0% -4.9%


The impacts of L/W will be felt especially by the poor, who -5.4%
-6.8% -6.2%
-7.3%
spend more of their income on energy and other goods than -10% -8.6%
other income brackets. By 2020, higher energy prices mean
that low income families in Indiana (with average incomes
-15% -13.8%
of $15,129) will spend between 18% and 20% of their
income on energy under L/W compared to a projected 15% IN Low IN High
without L/W. Others on fixed incomes, such as the elderly -20%
will also suffer disproportionately. MAN EIS CHEM TRAN

Impact on State Budgets6 Figure 6: Impact on Production


Figure 6. Percent Change in Production by
The increases in Indiana’s energy costs under L/W will Percentage Change from Baseline in 2020
Sector in 2020
impact expenditures throughout the state. Specifically, 0%
Indiana’s 2,882 schools and universities and 171 hospitals -10%
will likely experience a 31% to 39% percent increase in
-20% -17.6% -18.7%
expenditures by 2020 and a 107% to 146% increase by
2030. For government entities, costs for services, including -30%
public transportation and vehicle fleets, such as school -40%
buses, will also rise under L/W. -44.2%
-50% -47.6%
IN Low IN High
-60%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; TRAN = Transportation equipment manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
Iowa
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands Figure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Iowa would lose 12,610 to 18,969 jobs in 2020 -10
and 31,499 to 41,930 jobs in 2030 (Figure 2). The primary
Thousands of Jobs

-15 -12.61

cause of job losses would be lower industrial output due to -20 -18.97
higher energy prices, the high cost of complying with -25
required emissions cuts, and greater competition from -30
overseas manufacturers with lower energy costs. -35 -31.50

-40
Decrease in Disposable Household Income -45 -41.93
IA-Low IA-High
Higher energy prices would have ripple impacts on prices -50
throughout the economy and would impose a financial cost
on households. Iowa would see disposable household
income reduced by $916 to $2,970 per year by 2020 and Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
$3,866 to $7,050 by 2030 (Figure 3). (Annual Dollars LostperperHousehold
Household)
0 2020 2030
L/W’s Impact on Energy Prices
-1,000
-916
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Iowa would
-3,000
increase between 73% and 140% by 2030, while electricity
Do lla rs

-2,970
prices would increase by 124% to 153%. Table 1 shows the -4,000
-3,866
increase in electricity, gasoline, and natural gas prices faced -5,000
by a typical Iowa household compared to national -6,000
household increases. Iowa residents would pay between -7,000
109% and 153% more for their natural gas by 2030. -8,000
IA Low IA High -7,050

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Table 1: Change in Energy Prices at Household Level
Factors Contributing to Higher Electricity Prices (% change from baseline)
L/W would reduce GHG emissions from all sectors of the IA
economy (transportation, residential, commercial, and Sector Year Low High
industry); however, as the largest emitter of GHGs, the 2020 31% 39%
Electricity
primary impact would fall on the electric sector. L/W 2030 124% 153%
(Residential)
would result in the electric industry shutting down most
2020 21% 67%
carbon-based generation and/or using expensive, as yet Gasoline (Retail)
unproven technology, to capture and store CO2. To meet 2030 73% 140%
the stringent goals of L/W, the electric industry would also Natural Gas 2020 28% 38%
have to substitute high cost technologies, such as biomass (Residential) 2030 109% 153%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output to Figure 4. (Billion
Baseline Loss in Gross
2007$)State Product
are estimated to reduce Iowa’s gross state product (GSP) by 2020 2030
between $1.4 and $2 billion per year by 2020 and $5.3 and $0.00
$6.3 billion by 2030 (Figure 4). -$1.00

Billio ns o f D o lla rs
-$2.00 -$1.45
Impact on Industry -$2.01
-$3.00
Iowa’s major economic sectors will be affected by emission -$4.00
caps (Figure 5).4 The current two largest sectors, chemical
-$5.00
manufacturing and food product manufacturing, show
decreases in output of 4.5% to 5.0% and 1.6% to 2.4%, -$6.00 -$5.35
-$6.32
respectively in 2020. All manufacturing sectors will suffer -$7.00
IA-Low IA-High
output losses of between 3.5% and 5.2% by 2020, while -$8.00
output from energy intensive sectors fall between 4.5% and
5.7%. Iowa’s electricity production would fall between
9.6% and 10.0% (Figure 6). These continued losses will Figure 5: Impact on Industrial Value of Shipments
have a lasting effect on the economic base of Iowa. Percentage
Figure 5.Change from Baseline
Percent Change inIndustry
in Output by 2020 in 2020
0%
Impact on Low Income Families5
The impacts of L/W will be felt especially by the poor, who -2% -1.6%
-2.4%
spend more of their income on energy and other goods than -4% -3.5%
other income brackets. By 2020, higher energy prices mean -4.5% -4.5%
that low income families in Iowa (with average incomes of -5.2% -5.0%
-6% -5.7%
$12,321) will spend between 23% and 26% of their income
on energy under L/W compared to a projected 20% without -8%
IA Low IA High
L/W. Others on fixed incomes, such as the elderly will also -10%
suffer disproportionately.
MAN EIS CHEM FOOD
6
Impact on State Budgets
The increases in Iowa’s energy costs under L/W will Figure 6: Impact
Figure on Production
6. Percent Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change frominBaseline
Sector 2020 in 2020
0%
Iowa’s 1,850 schools and universities and 126 hospitals
will likely experience a 31% to 39% percent increase in -2%
expenditures by 2020 and a 107% to 146% increase by -4%
2030. For government entities, costs for services, including
-6%
public transportation and vehicle fleets, such as school
buses, will also rise under L/W. -8%
-10% -9.6%
IA Low IA High -10.0%
-12%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; FOOD = Food products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Kansas
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands ofFigure
Jobs) 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Kansas would lose 11,093 to 16,687 jobs in -10
2020 and 27,709 to 36,884 jobs in 2030 (Figure 2). The
Thousands of Jobs

-11.09
primary cause of job losses would be lower industrial -15
-16.69
output due to higher energy prices, the high cost of -20
complying with required emissions cuts, and greater -25
competition from overseas manufacturers with lower
-30 -27.71
energy costs.
-35
KS-Low KS-High
Decrease in Disposable Household Income -40 -36.88

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Kansas would see disposable household Figure 3: Household
Figure 3.Impact
Loss of Relative
DisposabletoIncome
Baseline
income reduced by $947 to $3,069 per year by 2020 and (Annual Dollars Lost per Household)
per Household
$3,994 to $7,283 by 2030 (Figure 3). 2020 2030
0
-1,000
L/W’s Impact on Energy Prices -947
-2,000
Most energy prices would rise under L/W, particularly coal,
-3,000
oil, and natural gas. The price of gasoline in Kansas would -3,069
D o lla r s

-4,000
increase between 73% and 140% by 2030, while electricity -3,994
-5,000
prices would increase by 124% to 153%. Table 1 shows the
increase in electricity, gasoline, and natural gas prices faced -6,000
by a typical Kansas household compared to national -7,000
household increases. Kansas residents would pay between -8,000 -7,283
KS Low KS High
109% and 153% more for their natural gas by 2030. -9,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and KS
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 39%
would result in the electric industry shutting down most (Residential) 2030 124% 153%
carbon-based generation and/or using expensive, as yet 2020 21% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 73% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 38%
have to substitute high cost technologies, such as biomass
(Residential) 2030 109% 153%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output to Baseline (Billion
Figure 2007$)
4. Loss in Gross State Product
are estimated to reduce Kansas’ gross state product (GSP) 2020 2030
by between $1.3 and $1.8 billion per year by 2020 and $4.8 $0.00
and $5.7 billion by 2030 (Figure 4). -$1.00

Billio ns o f D o lla rs
-$2.00 -$1.31
Impact on Industry -$1.82
Kansas’ major economic sectors will be affected by -$3.00
emission caps (Figure 5).4 The current two largest sectors, -$4.00
chemical manufacturing and transportation manufacturing, -$5.00
show decreases in output of 4.5% to 5.0% and 6.6% to -$4.83
13.8%, respectively in 2020. All manufacturing sectors will -$6.00 -$5.70
KS-Low KS-High
suffer output losses of between 3.5% and 5.2% by 2020, -$7.00
while output from energy intensive sectors fall between
4.5% and 5.7%. In addition, the general shift away from
coal would result in a 31.2% to 31.6% reduction in coal Figure 5: Impact on Industrial Value of Shipments
production and electricity production would fall by 4.1% to Percentage
Figure 5.Change from Baseline
Percent Change inIndustry
in Output by 2020 in 2020
6.5% (Figure 6). These losses would be significantly higher
by 2030 and would have a lasting impact on Kansas’ 0%
economic base.
-5% -3.5%
-4.5% -4.5% -5.0%
Impact on Low Income Families5 -5.2% -5.7%
-6.6%
The impacts of L/W will be felt especially by the poor, who -10%
spend more of their income on energy and other goods than
other income brackets. By 2020, higher energy prices mean -15% -13.8%
that low income families in Kansas (with average incomes KS Low KS High
of $13,413) will spend between 21% and 24% of their -20%
income on energy under L/W compared to a projected 18% MAN EIS CHEM TRAN
without L/W. Others on fixed incomes, such as the elderly
will also suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact


Figure on Production
6. Percent Change in Production by
Percentage Change frominBaseline
Sector 2020 in 2020
The increases in Kansas’ energy costs under L/W will 0%
impact expenditures throughout the state. Specifically, -5% -4.1%
Kansas’ 1,695 schools and universities and 159 hospitals -6.5%
-10%
will likely experience a 31% to 39% percent increase in -15%
expenditures by 2020 and a 107% to 146% increase by -20%
2030. For government entities, costs for services, including -25%
public transportation and vehicle fleets, such as school -30%
buses, will also rise under L/W. -35% -31.2% -31.6%
KS Low KS High
-40%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; TRAN = Transportation equipment manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Kentucky
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands ofFigure
Jobs) 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Kentucky would lose 15,789 to 23,751 jobs in
2020 and 41,051 to 54,645 jobs in 2030 (Figure 2). The
Thousands of Jobs

-15.79
-20
primary cause of job losses would be lower industrial -23.75
output due to higher energy prices, the high cost of -30
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -40
-41.05
energy costs.
-50
KY-Low KY-High
Decrease in Disposable Household Income -60
-54.65

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Kentucky would see disposable household Figure 3: Household Impact
Figure 3. Loss ofRelative to Baseline
Disposable Income
income reduced by $794 to $2,575 per year by 2020 and (Annual Dollars Lost per Household)
per Household
$3,383 to $6,169 by 2030 (Figure 3). 2020 2030
0
L/W’s Impact on Energy Prices -1,000 -794
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Kentucky
D o lla r s

-3,000 -2,575
would increase between 74% and 144% by 2030, while
-3,383
electricity prices would increase by 122% to 159%. Table 1 -4,000
shows the increase in electricity, gasoline, and natural gas -5,000
prices faced by a typical Kentucky household compared to
-6,000
national household increases. Kentucky residents would
KY Low KY High -6,169
pay between 99% and 142% more for their natural gas by -7,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and KY
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 32% 40%
would result in the electric industry shutting down most (Residential) 2030 122% 159%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also Natural Gas 2020 25% 35%
have to substitute high cost technologies, such as biomass (Residential) 2030 99% 142%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


Figure
to Baseline 4. Loss2007$)
(Billion in Gross State Product
High energy prices, fewer jobs, and loss of industrial output 2020 2030
$0.00
are estimated to reduce Kentucky’s gross state product
(GSP) by between $1.7 and $2.4 billion per year by 2020 -$1.00

B illio ns o f D o lla rs
and $6.4 and $7.6 billion by 2030 (Figure 4). -$2.00
-$1.74
-$3.00 -$2.41
Impact on Industry -$4.00
Kentucky’s major economic sectors will be affected by -$5.00
emission caps (Figure 5).4 The current two largest sectors, -$6.00
transportation manufacturing and primary metals -$7.00 -$6.41
manufacturing, show decreases in output of 5.9% to 13.2% -$8.00 -$7.56
KY-Low KY-High
and 15.8% to 18.3%, respectively in 2020. All -$9.00
manufacturing sectors will suffer output losses of between
3.5% and 5.9% by 2020, while output from energy
intensive sectors fall between 7.5% and 9.5%. Kentucky’s Figure 5: Impact on Industrial Value of Shipments
coal production would fall between 18.5% and 22.1%, and Percentage Change
Figure 5. Percent frominBaseline
Change in 2020in 2020
Output by Industry
its electricity production would fall between 17.6% and 0%
18.7% (Figure 6). These continued losses will have a
lasting effect on the economic base of Kentucky. -5% -3.5%
-5.9% -5.9%
5 -10% -7.5%
Impact on Low Income Families -9.5%
The impacts of L/W will be felt especially by the poor, who -15% -13.2%
spend more of their income on energy and other goods than -15.8%
other income brackets. By 2020, higher energy prices mean -20% -18.3%
that low income families in Kentucky (with average KY Low KY High
-25%
incomes of $11,541) will spend between 24% and 26% of
their income on energy under L/W compared to a projected MAN EIS TRAN MET
20% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately. Figure 6: Impact on Production
Figure 6. Percent Change in Production by
Percentage Change from
Sector Baseline in 2020
in 2020
Impact on State Budgets6 0%
The increases in Kentucky’s energy costs under L/W will -5%
impact expenditures throughout the state. Specifically,
-10%
Kentucky’s 1,865 schools and universities and 134
hospitals will likely experience a 28% to 35% percent -15%
increase in expenditures by 2020 and a 91% to 123% -17.6%
-20% -18.5% -18.7%
increase by 2030. For government entities, costs for -22.1%
-25%
services, including public transportation and vehicle fleets, KY Low KY High
such as school buses, will also rise under L/W. -30%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; TRAN = Transportation equipment manufacturing; MET = Primary metals manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Louisiana
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Louisiana would lose 16,946 to 25,492 jobs in
-20
Thousands of Jobs

-16.95
2020 and 45,874 to 61,065 jobs in 2030 (Figure 2). The
primary cause of job losses would be lower industrial -30 -25.49

output due to higher energy prices, the high cost of -40


complying with required emissions cuts, and greater
-45.87
competition from overseas manufacturers with lower -50
energy costs. -60
-61.07
LA-Low LA-High
-70
Decrease in Disposable Household Income
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Louisiana would see disposable household
Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
income reduced by $794 to $2,574 per year by 2020 and
(Annual Dollars LostperperHousehold
Household)
$3,343 to $6,095 by 2030 (Figure 3).
2020 2030
0
L/W’s Impact on Energy Prices
-1,000 -794
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in Louisiana -2,000
would increase between 76% and 147% by 2030, while
D ollars

-3,000 -2,574
electricity prices would increase by 101% to 145%. Table 1 -3,343
shows the increase in electricity, gasoline, and natural gas -4,000
prices faced by a typical Louisiana household compared to -5,000
national household increases. Louisiana residents would
-6,000
pay between 101% and 145% more for their natural gas by LA Low LA High -6,095
2030. -7,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and LA
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 32% 35%
would result in the electric industry shutting down most (Residential) 2030 101% 145%
carbon-based generation and/or using expensive, as yet 2020 21% 71%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 76% 147%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 25% 36%
have to substitute high cost technologies, such as biomass
(Residential) 2030 101% 145%
and wind, for conventional generation.

Impact on Economic Growth


Figure 4: Annual Impact of GSP Relative
High energy prices, fewer jobs, and loss of industrial output Figure (Billion
to Baseline 4. Loss in Gross State Product
2007$)
are estimated to reduce Louisiana’s gross state product 2020 2030
$0.00
(GSP) by between $2.1 and $3 billion per year by 2020 and
$7.9 and $9.3 billion by 2030 (Figure 4). -$2.00

B illio ns o f D o lla rs
-$2.14
Impact on Industry -$4.00 -$2.97
Louisiana’s major economic sectors will be affected by
-$6.00
emission caps (Figure 5).4 The current two largest
sectors, transportation manufacturing and petroleum and -$8.00
-$7.91
coal productions manufacturing, show decreases in
-$10.00 -$9.34
output of 5.5% to 13.9% and 0.2% to 4.6%, respectively LA-Low LA-High
in 2020. All manufacturing sectors will suffer output -$12.00
losses of between 2.6% and 4.2% by 2020, while output
from energy intensive sectors fall between 2.2% and
4.3%. In addition, the general shift away from coal Figure 5: Impact on Industrial Value of Shipments
Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020in 2020
by Industry
would result in a 36.1% to 37.5% reduction in coal
production and electricity production would fall by 4.1% 0%
-0.2%
to 6.5% (Figure 6). These losses would be significantly
-2.6% -2.2%
higher by 2030 and would have a lasting impact on -5% -4.2% -4.3% -4.6%
Louisiana’s economic base. -5.5%

-10%
Impact on Low Income Families5
The impacts of L/W will be felt especially by the poor, who -15% -13.9%
spend more of their income on energy and other goods than
LA Low LA High
other income brackets. By 2020, higher energy prices mean -20%
that low income families in Louisiana (with average MAN EIS TRAN PET
incomes of $10,918) will spend between 25% and 27% of
their income on energy under L/W compared to a projected Figure 6: Impact on Production
Figure 6. Percent Change in Production by
21% without L/W. Others on fixed incomes, such as the Percentage Change from
Sector Baseline in 2020
in 2020
elderly will also suffer disproportionately. 0%
-5% -4.1%
-10% -6.5%
Impact on State Budgets6
-15%
The increases in Louisiana’s energy costs under L/W will -20%
impact expenditures throughout the state. Specifically, -25%
Louisiana’s 2,053 schools and universities and 245 -30%
hospitals will likely experience a 28% to 35% percent -35%
-40% -36.1%
increase in expenditures by 2020 and a 91% to 123% -37.5% LA Low LA High
increase by 2030. For government entities, costs for -45%
services, including public transportation and vehicle fleets, Coal Electricity
such as school buses, will also rise under L/W.

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; TRAN = Transportation equipment manufacturing; PET = Petroleum and coal productions manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data
to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
Maine
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-2
Under L/W, Maine would lose 5,248 to 7,895 jobs in 2020 -4
and 12,835 to 17,085 jobs in 2030 (Figure 2). The primary
Thousands of Jobs

-6 -5.25

cause of job losses would be lower industrial output due to -8


-7.89
higher energy prices, the high cost of complying with -10
required emissions cuts, and greater competition from -12
overseas manufacturers with lower energy costs. -14 -12.84

-16
Decrease in Disposable Household Income -18 -17.09
ME-Low ME-High
Higher energy prices would have ripple impacts on prices -20
throughout the economy and would impose a financial cost
on households. Maine would see disposable household Figure 3: Household Impact Relative to Baseline
Figure 3.Lost
(Annual Dollars Loss per
of Disposable
Household)Income
income reduced by $807 to $2,617 per year by 2020 and
per Household
$3,517 to $6,414 by 2030 (Figure 3).
0
2020 2030
L/W’s Impact on Energy Prices -1,000 -807
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Maine would -3,000 -2,617
D o llars

increase between 74% and 144% by 2030, while electricity


-4,000 -3,517
prices would increase by 54% to 81%. Table 1 shows the
increase in electricity, gasoline, and natural gas prices faced -5,000
by a typical Maine household compared to national -6,000
household increases. Maine residents would pay between -7,000 -6,414
86% and 121% more for their natural gas by 2030. ME Low ME High
-8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
ME
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 18% 22%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 54% 81%
unproven technology, to capture and store CO2. To meet 2020 20% 67%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 144%
have to substitute high cost technologies, such as biomass Natural Gas 2020 20% 28%
and wind, for conventional generation. (Residential) 2030 86% 121%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Maine’s gross state product (GSP) Figure 4: Annual Impact of GSP Relative
by between $561 and $777 million per year by 2020 and toFigure 4. Loss
Baseline in Gross
(Billion State Product
2007$)
2020 2030
$2.1 and $2.4 billion by 2030 (Figure 4). $0.00

Impact on Industry -$0.50

Billio ns o f D o lla rs
-$0.56
Maine’s major economic sectors will be affected by -$1.00 -$0.78
emission caps (Figure 5).4 The current two largest sectors,
-$1.50
transportation manufacturing and paper manufacturing,
show decreases in output of 6.5% to 14.0% and 5.2% to -$2.00
7.2%, respectively in 2020. All manufacturing sectors will -$2.07
-$2.50
suffer output losses of between 2.9% and 4.0% by 2020, ME-Low ME-High
-$2.44
while output from energy intensive sectors fall between -$3.00
8.0% and 9.9%. Electricity production would fall by
between 9.2% and 12.0% (Figure 6). These losses would be
significantly higher by 2030 and would have a lasting Figure 5: Impact on Industrial Value of Shipments
impact on Maine’s economic base. Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020

0%
Impact on Low Income Families5
The impacts of L/W will be felt especially by the poor, who -5% -2.9%
-4.0%
spend more of their income on energy and other goods than -5.2%
-6.5% -7.2%
other income brackets. By 2020, higher energy prices mean -10% -8.0%
that low income families in Maine (with average incomes -9.9%
of $14,661) will spend between 23% and 26% of their
-15% -14.0%
income on energy under L/W compared to a projected 19%
without L/W. Others on fixed incomes, such as the elderly ME Low ME High
-20%
will also suffer disproportionately.
MAN EIS TRAN PAP
6
Impact on State Budgets
The increases in Maine’s energy costs under L/W will Figure 6: Impact on Production
Figure 6. Percent Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
0%
Maine’s 861 schools and universities and 42 hospitals will
likely experience a 28% to 38% percent increase in -3%
expenditures by 2020 and an 88% to 127% increase by
2030. For government entities, costs for services, including -6%
public transportation and vehicle fleets, such as school
-9%
buses, will also rise under L/W. -9.2%
-12% -12.0%
ME Low ME High
-15%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; TRAN = Transportation equipment manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Maryland
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
0
2020 2030
Impact on Jobs
.

-20
Under L/W, Maryland would lose 26,885 to 40,442 jobs in
-26.89
2020 and 75,864 to 100,986 jobs in 2030 (Figure 2). The
Thousands of Jobs

-40
primary cause of job losses would be lower industrial -40.44

output due to higher energy prices, the high cost of -60


complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -80 -75.86

energy costs.
-100
-100.99
MD-Low MD-High
Decrease in Disposable Household Income -120
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
Figure 3. Loss of Disposable Income
on households. Maryland would see disposable household (Annual Dollars Lost per Household)
per Household
income reduced by $1,191 to $3,863 per year by 2020 and
2020 2030
$5,022 to $9,157 by 2030 (Figure 3). 0

-2,000 -1,191
L/W’s Impact on Energy Prices
Most energy prices would rise under L/W, particularly coal, -4,000
-3,863
D ollars

oil, and natural gas. The price of gasoline in Maryland -5,022


would increase between 74% and 145% by 2030, while -6,000
electricity prices would increase by 103% to 135%. Table 1 -8,000
shows the increase in electricity, gasoline, and natural gas
prices faced by a typical Maryland household compared to -10,000 -9,157

national household increases. Maryland residents would MD Low MD High


-12,000
pay between 91% and 131% more for their natural gas by
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
MD
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 30% 39%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 103% 135%
unproven technology, to capture and store CO2. To meet 2020 21% 70%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 145%
have to substitute high cost technologies, such as biomass Natural Gas 2020 23% 32%
and wind, for conventional generation. (Residential) 2030 91% 131%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Maryland’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $3 and $4.2 billion per year by 2020 and toFigure
Baseline (Billion
4. Loss 2007$)
in Gross State Product
$11.1 and $13.1 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$2.00

B illio ns o f D o lla rs
Maryland’s major economic sectors will be affected by -$4.00 -$3.01
emission caps (Figure 5).4 The current two largest sectors, -$6.00
-$4.18
chemical manufacturing and food products manufacturing,
-$8.00
show decreases in output of 7.2% to 8.2% and 1.6% to
-$10.00
2.4%, respectively in 2020. All manufacturing sectors will
suffer output losses of between 3.2% and 4.4% by 2020, -$12.00 -$11.12
while output from energy intensive sectors fall between -$14.00 -$13.13
7.8% and 9.1%. In addition, the general shift away from MD-Low MD-High
-$16.00
coal would result in a 36% reduction in coal production and
electricity production would fall by 0.4% to 1.6% (Figure
6). These losses would be significantly higher by 2030 and Figure 5: Impact on Industrial Value of Shipments
would have a lasting impact on Maryland’s economic base. Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020

Impact on Low Income Families5 0%

The impacts of L/W will be felt especially by the poor, who -3% -1.6%
-2.4%
spend more of their income on energy and other goods than -3.2%
-4.4%
other income brackets. By 2020, higher energy prices mean -6%
that low income families in Maryland (with average -7.8% -7.2%
-9% -8.2%
incomes of $17,000) will spend between 15% and 17% of -9.1%
their income on energy under L/W compared to a projected -12%
13% without L/W. Others on fixed incomes, such as the MD Low MD High
elderly will also suffer disproportionately. -15%
MAN EIS CHEM FOOD
Impact on State Budgets6
Figure 6: Impact on Production
The increases in Maryland’s energy costs under L/W will Figure 6. Percent Change in Production by
Percentage Change from Baseline in 2020
impact expenditures throughout the state. Specifically, Sector in 2020 -0.4%
0%
Maryland’s 2,216 schools and universities and 74 hospitals -5% -1.6%
will likely experience a 28% to 35% percent increase in -10%
expenditures by 2020 and a 91% to 123% increase by 2030. -15%
For government entities, costs for services, including public -20%
transportation and vehicle fleets, such as school buses, will -25%
also rise under L/W. -30%
-35%
-40% -36.0% -35.9%
MD Low MD High
-45%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; FOOD = Food products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Massachusetts
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10

Under L/W, Massachusetts would lose 25,492 to 38,347 -20


Thousands of Jobs

jobs in 2020 and 62,344 to 82,990 jobs in 2030 (Figure 2). -30 -25.49

The primary cause of job losses would be lower industrial -40 -38.35
output due to higher energy prices, the high cost of -50
complying with required emissions cuts, and greater -60
competition from overseas manufacturers with lower -62.34
-70
energy costs.
-80
MA-Low MA-High -82.99
-90
Decrease in Disposable Household Income
Higher energy prices would have ripple impacts on prices Figure 3: Household Impact Relative to Baseline
throughout the economy and would impose a financial cost Figure 3.Lost
(Annual Dollars Lossper
of Disposable
Household) Income
on households. Massachusetts would see disposable per Household
household income reduced by $1,341 to $4,346 per year by 2020 2030
0
2020 and $5,842 to $10,653 by 2030 (Figure 3).
-2,000 -1,341
L/W’s Impact on Energy Prices
-4,000
Most energy prices would rise under L/W, particularly coal,
Dollars

-4,346
oil, and natural gas. The price of gasoline in Massachusetts -6,000 -5,842
would increase between 74% and 144% by 2030, while
electricity prices would increase by 54% to 81%. Table 1 -8,000
shows the increase in electricity, gasoline, and natural gas
-10,000
prices faced by a typical Massachusetts household
MA Low MA High -10,653
compared to national household increases. Massachusetts -12,000
residents would pay between 86% and 121% more for their
natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, fewer
constraints on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low
nuclear additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and MA
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 18% 22%
would result in the electric industry shutting down most (Residential) 2030 54% 81%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 20% 28%
have to substitute high cost technologies, such as biomass
(Residential) 2030 86% 121%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


to Baseline (Billion 2007$)
High energy prices, fewer jobs, and loss of industrial output Figure 4. Loss in Gross State Product
are estimated to reduce Massachusetts gross state product 2020 2030
(GSP) by between $4.1 and $5.6 billion per year by 2020 $0.00
and $14.9 and $17.7 billion by 2030 (Figure 4). -$2.00

B illio ns o f D o lla rs
-$4.00
-$6.00 -$4.05
Impact on Industry -$5.62
-$8.00
Massachusetts’ major economic sectors will be affected by -$10.00
emission caps (Figure 5).4 The current two largest sectors, -$12.00
chemical manufacturing and computer and electronic -$14.00
products manufacturing, show decreases in output of 6.1% -$16.00 -$14.95
to 6.8% and 2.0% to 1.6%, respectively in 2020. All -$18.00 MA-Low MA-High -$17.66
manufacturing sectors will suffer output losses of between -$20.00
2.9% and 4.0% by 2020, while output from energy
intensive sectors fall between 8.0% and 9.9%. Electricity
production would fall by between 9.2% and 12.0% (Figure Figure 5: Impact on Industrial Value of Shipments
6). These losses would be significantly higher by 2030 and Percentage
Figure 5.Change from Baseline
Percent Change inIndustry
in Output by 2020 in 2020
would have a lasting impact on Massachusetts’ economic 0%
base.
-3% -2.0% -1.6%
-2.9%
Impact on Low Income Families5 -4.0%
-6%
The impacts of L/W will be felt especially by the poor, who -6.1% -6.8%
spend more of their income on energy and other goods than -9% -8.0%
other income brackets. By 2020, higher energy prices mean -9.9%
that low income families in Massachusetts (with average -12%
MA Low MA High
incomes of $16,376) will spend between 21% and 23% of -15%
their income on energy under L/W compared to a projected
MAN EIS CHEM COMP
17% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately.
Figure 6: Impact on Production
Figure 6. Change
Percentage Percentfrom
Change in Production
Baseline in 2020 by
6
Impact on State Budgets Sector in 2020
0%
The increases in Massachusetts’ energy costs under L/W
-2%
will impact expenditures throughout the state. Specifically,
Massachusetts’ 2,689 schools and universities and 140 -4%
hospitals will likely experience a 28% to 38% percent -6%
increase in expenditures by 2020 and an 88% to 127% -8%
increase by 2030. For government entities, costs for -10% -9.2%
services, including public transportation and vehicle fleets, -12% -12.0%
MA Low MA High
such as school buses, will also rise under L/W. -14%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; PAP = Computer and electronic products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Michigan
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands ofFigure
Jobs) 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-20
Under L/W, Michigan would lose 37,400 to 56,260 jobs in
2020 and 91,490 to 121,786 jobs in 2030 (Figure 2). The -40
Thousands of Jobs

-37.40

primary cause of job losses would be lower industrial -60 -56.26


output due to higher energy prices, the high cost of
-80
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -100 -91.49

energy costs.
-120
-121.79
MI-Low MI-High
Decrease in Disposable Household Income -140
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Michigan would see disposable household Figure
(Annual Dollars 3. Loss
Lost of Disposable Income
per Household)
income reduced by $933 to $3,024 per year by 2020 and per Household
$3,867 to $7,051 by 2030 (Figure 3). 2020 2030
0

L/W’s Impact on Energy Prices -1,000


-933
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Michigan -3,000
Dollars

-3,024
would increase between 72% and 141% by 2030, while -4,000 -3,867
electricity prices would increase by 126% to 177%. Table 1 -5,000
shows the increase in electricity, gasoline, and natural gas
-6,000
prices faced by a typical Michigan household compared to
national household increases. Michigan residents would -7,000
MI Low MI High -7,051
pay between 112% and 160% more for their natural gas by -8,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and MI
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 38%
would result in the electric industry shutting down most (Residential) 2030 126% 177%
carbon-based generation and/or using expensive, as yet 2020 20% 68%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 72% 141%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 29% 40%
have to substitute high cost technologies, such as biomass
(Residential) 2030 112% 160%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Michigan’s gross state product toFigure
Baseline (Billion
4. Loss 2007$)State Product
in Gross
(GSP) would be between $4.8 and $6.6 billion per year by 2020 2030
$0.00
2020 and $17.7 and $20.9 billion by 2030 (Figure 4).
-$4.00

Billions of Dollars
Impact on Industry -$4.79
-$8.00 -$6.64
Michigan’s major economic sectors will be affected by
emission caps (Figure 5).4 The current two largest sectors, -$12.00
chemical manufacturing and transportation equipment
manufacturing, show decreases in output of 4.9% to 5.4% -$16.00

and 6.2% to 13.8%, respectively in 2020. All -$20.00 -$17.66


manufacturing sectors will suffer output losses of between MI-Low MI-High -$20.86
4% and 7.3% by 2020, while output from energy intensive -$24.00
sectors fall between 6.8% and 8.6%. Electricity production
would fall by between 17.6% and 18.7% (Figure 6). These Figure 5: Impact on Industrial Value of Shipments
losses would be significantly higher by 2030 and would Percentage Change
Figure 5. Percent frominBaseline
Change in 2020in 2020
Output by Industry
have a lasting impact on Michigan’s economic base. 0%
5
Impact on Low Income Families
-5% -4.0% -4.9%
The impacts of L/W will be felt especially by the poor, who -5.4% -6.2%
-7.3% -6.8%
spend more of their income on energy and other goods than
-10% -8.6%
other income brackets. By 2020, higher energy prices mean
that low income families in Michigan (with average
incomes of $13,881) will spend between 20% and 22% of -15% -13.8%
their income on energy under L/W compared to a projected MI Low MI High
17% without L/W. Others on fixed incomes, such as the -20%
elderly will also suffer disproportionately. MAN EIS CHEM TRAN

Impact on State Budgets6


The increases in Michigan’s energy costs under L/W will Figure 6: Impact on Production
Percentage Change
Figure 6. Percent from
Change Baseline inby2020
in Production Sector in
impact expenditures throughout the state. Specifically, 2020
Michigan’s 5,178 schools and universities and 187 0%
hospitals will likely experience a 31% to 39% percent
-5%
increase in expenditures by 2020 and a 107% to 146%
increase by 2030. For government entities, costs for -10%
services, including public transportation and vehicle fleets, -15%
such as school buses, will also rise under L/W. -17.6%
-20% -18.7%
MI Low MI High
-25%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; TRAN = Transportation equipment manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Minnesota
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Minnesota would lose 22,426 to 33,735 jobs in -20
2020 and 56,018 to 74,569 jobs in 2030 (Figure 2). The
Thousands of Jobs

-22.43
primary cause of job losses would be lower industrial -30
-33.74
output due to higher energy prices, the high cost of -40
complying with required emissions cuts, and greater -50
competition from overseas manufacturers with lower
-60 -56.02
energy costs.
-70
MN-Low MN-High
Decrease in Disposable Household Income -80 -74.57

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Minnesota would see disposable household
Figure 3: Household
Figure 3.Impact
Loss ofRelative to Income
Disposable Baseline
income reduced by $1,066 to $3,455 per year by 2020 and
(Annual Dollars Lost per Household)
per Household
$4,497 to $8,201 by 2030 (Figure 3).
2020 2030
0
L/W’s Impact on Energy Prices -1,000
-1,066
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Minnesota -3,000
would increase between 73% and 140% by 2030, while -4,000 -3,455
D ollars

electricity prices would increase by 124% to 153%. Table 1 -5,000 -4,497

shows the increase in electricity, gasoline, and natural gas -6,000


prices faced by a typical Minnesota household compared to -7,000
national household increases. Minnesota residents would -8,000
-8,201
pay between 109% and 153% more for their natural gas by -9,000
MN Low MN High
2030. -10,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and MN
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 39%
would result in the electric industry shutting down most (Residential) 2030 124% 153%
carbon-based generation and/or using expensive, as yet 2020 21% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 73% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 38%
have to substitute high cost technologies, such as biomass
(Residential) 2030 109% 153%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output Figure (Billion
to Baseline 4. Loss in Gross State Product
2007$)
are estimated to reduce Minnesota’s gross state product 2020 2030
$0.00
(GSP) by between $2.9 and $4 billion per year by 2020 and
-$2.00
$10.7 and $12.6 billion by 2030 (Figure 4).

B illio ns o f D o lla rs
-$4.00 -$2.90
-$4.02
Impact on Industry -$6.00
Minnesota’s major economic sectors will be affected by -$8.00
emission caps (Figure 5).4 The current two largest sectors, -$10.00
computer and electronic products manufacturing and paper
-$12.00 -$10.70
manufacturing, show decreases in output of 1.6% to 1.9%
-$12.63
and 5.3% to 7.0%, respectively in 2020. All manufacturing -$14.00
MN-Low MN-High
sectors will suffer output losses of between 3.5% and 5.2% -$16.00
by 2020, while output from energy intensive sectors fall
between 4.5% and 5.7%. Electricity production would fall
by between 9.6% and 10.0% (Figure 6). These losses would Figure 5: Impact on Industrial Value of Shipments
be significantly higher by 2030 and would have a lasting Percentage Change
Figure 5. Percent frominBaseline
Change Output byin 2020in 2020
Industry
impact on Minnesota’s economic base. 0%
-1.9% -1.6%
Impact on Low Income Families5 -5% -3.5%
-5.2% -4.5% -5.3%
The impacts of L/W will be felt especially by the poor, who -5.7%
-7.0%
spend more of their income on energy and other goods than -10%
other income brackets. By 2020, higher energy prices mean
that low income families in Minnesota (with average -15%
incomes of $17,156) will spend between 16% and 18% of
MN Low MN High
their income on energy under L/W compared to a projected -20%
14% without L/W. Others on fixed incomes, such as the
MAN EIS COMP PAP
elderly will also suffer disproportionately.
FigureFigure
6: Impact on Production
6. Percent Change in Production by
Impact on State Budgets6 Percentage
0.0% Change from in
0.0% Sector Baseline
2020 in 2020
The increases in Minnesota’s energy costs under L/W will 0%
impact expenditures throughout the state. Specifically, -2%
Minnesota’s 3,454 schools and universities and 147 -4%
hospitals will likely experience a 31% to 39% percent -6%
increase in expenditures by 2020 and a 107% to 146% -8%
increase by 2030. For government entities, costs for
-10% -9.6%
services, including public transportation and vehicle fleets, -10.0%
-12%
such as school buses, will also rise under L/W. MN Low MN High
-14%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; COMP = Computer and electronic products manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Mississippi
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Mississippi would lose 10,338 to 15,551 jobs -10
in 2020 and 26,878 to 35,778 jobs in 2030 (Figure 2). The
Thousands of Jobs

-10.34

primary cause of job losses would be lower industrial -15


-15.55
output due to higher energy prices, the high cost of -20
complying with required emissions cuts, and greater -25
competition from overseas manufacturers with lower -26.88
-30
energy costs.
-35
MS-Low MS-High -35.78
Decrease in Disposable Household Income -40
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Mississippi would see disposable household Figure 3.Lost
(Annual Dollars Loss per
of Disposable
Household)Income
income reduced by $770 to $2,496 per year by 2020 and per Household
$3,280 to $5,980 by 2030 (Figure 3). 0
2020 2030

L/W’s Impact on Energy Prices -1,000 -770

Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Mississippi
D o lla rs

-3,000 -2,496
would increase between 74% and 144% by 2030, while -3,280
electricity prices would increase by 122% to 159%. Table 1 -4,000
shows the increase in electricity, gasoline, and natural gas -5,000
prices faced by a typical Mississippi household compared
-6,000
to national household increases. Mississippi residents MS Low MS High -5,980
would pay between 99% and 142% more for their natural -7,000
gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the Table 1: Change in Energy Prices at Household Level
economy (transportation, residential, commercial, and (% change from baseline)
industry); however, as the largest emitter of GHGs, the MS
primary impact would fall on the electric sector. L/W Sector Year Low High
would result in the electric industry shutting down most Electricity 2020 32% 40%
carbon-based generation and/or using expensive, as yet (Residential) 2030 122% 159%
unproven technology, to capture and store CO2. To meet 2020 21% 70%
the stringent goals of L/W, the electric industry would also Gasoline (Retail)
2030 74% 144%
have to substitute high cost technologies, such as biomass
Natural Gas 2020 25% 35%
and wind, for conventional generation.
(Residential) 2030 99% 142%
Impact on Economic Growth
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Mississippi’s gross state product Figure 4: Annual Impact of GSP Relative
Figure 4. (Billion
to Baseline Loss in Gross
2007$)State Product
(GSP) by between $1 and $1.4 billion per year by 2020 and
2020 2030
$3.7 and $4.3 billion by 2030 (Figure 4). $0.00
-$0.50
Impact on Industry -$1.00

B illio ns o f D o lla rs
-$1.00
-$1.50
Mississippi’s major economic sectors will be affected by -$1.39
emission caps (Figure 5).4 The current two largest sectors, -$2.00

chemical manufacturing and wood products manufacturing, -$2.50

show decreases in output of 8.1% to 9.6% and 4.7% to -$3.00


-$3.50
4.9%, respectively in 2020. All manufacturing sectors will
-$4.00 -$3.69
suffer output losses of between 3.5% and 5.9% by 2020,
-$4.50 MS-Low MS-High -$4.35
while output from energy intensive sectors fall between
-$5.00
7.5% and 9.5%. Mississippi’s coal production would fall
between 18.5% and 22.1%, although due to its low cost of
generation, electricity supply could rise slightly over the
baseline forecast (Figure 6). Continued losses in production Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
will have a lasting effect on the economic base of Percentage Change from Baseline in 2020
Mississippi. 0%

-3%
Impact on Low Income Families5 -3.5%
-4.7% -4.9%
The impacts of L/W will be felt especially by the poor, who -6%
-5.9%
spend more of their income on energy and other goods than -7.5% -8.1%
-9%
other income brackets. By 2020, higher energy prices mean -9.5% -9.6%
that low income families in Mississippi (with average -12%
incomes of $10,918) will spend between 25% and 28% of MS Low MS High
their income on energy under L/W compared to a projected -15%
21% without L/W. Others on fixed incomes, such as the MAN EIS CHEM WOOD
elderly will also suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact on Production


The increases in Mississippi’s energy costs under L/W will Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
impact expenditures throughout the state. Specifically, Sector in 2020
5%
Mississippi’s 1,332 schools and universities and 117 1.5% 0.9%
hospitals will likely experience a 28% to 35% percent 0%
increase in expenditures by 2020 and a 91% to 123% -5%
increase by 2030. For government entities, costs for -10%
services, including public transportation and vehicle fleets, -15%
such as school buses, will also rise under L/W. -20% -18.5%
-25% -22.1%
MS Low MS High
-30%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; WOOD = Wood products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Missouri
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands Figure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Missouri would lose 22,892 to 34,436 jobs in -20
2020 and 57,182 to 76,118 jobs in 2030 (Figure 2). The
Thousands of Jobs

-22.89
-30
primary cause of job losses would be lower industrial -40 -34.44
output due to higher energy prices, the high cost of
-50
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -60 -57.18

energy costs. -70


-80 -76.12
MO-Low MO-High
Decrease in Disposable Household Income -90
Higher energy prices would have ripple impacts on prices Figure 3: Household Impact Relative to Baseline
throughout the economy and would impose a financial cost FigureLost
(Annual Dollars 3. Loss
perof Disposable Income
Household)
on households. Missouri would see disposable household per Household
income reduced by $891 to $2,887 per year by 2020 and 2020 2030
0
$3,758 to $6,852 by 2030 (Figure 3).
-1,000 -891
L/W’s Impact on Energy Prices -2,000
Most energy prices would rise under L/W, particularly coal, -3,000
D ollars

-2,887
oil, and natural gas. The price of gasoline in Missouri -4,000 -3,758
would increase between 73% and 140% by 2030, while
-5,000
electricity prices would increase by 124% to 153%. Table 1
shows the increase in electricity, gasoline, and natural gas -6,000
prices faced by a typical Missouri household compared to -7,000
-6,852
MO Low MO High
national household increases. Missouri residents would pay -8,000
between 109% and 153% more for their natural gas by
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and MO
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 39%
would result in the electric industry shutting down most (Residential) 2030 124% 153%
carbon-based generation and/or using expensive, as yet 2020 21% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 73% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 38%
have to substitute high cost technologies, such as biomass
(Residential) 2030 109% 153%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Missouri’s gross state product toFigure 4. Loss
Baseline in Gross
(Billion 2007$)State Product
(GSP) by between $2.7 and $3.7 billion per year by 2020 2020 2030
$0.00
and $10 and $11.8 billion by 2030 (Figure 4).
-$2.00

B illio ns o f D o lla rs
Impact on Industry -$4.00 -$2.70
-$3.74
Missouri’s major economic sectors will be affected by -$6.00
emission caps (Figure 5).4 The current two largest sectors,
-$8.00
chemical manufacturing and food products manufacturing,
show decreases in output of 4.5% to 5.0% and 1.6% to -$10.00
2.4%, respectively in 2020. All manufacturing sectors will -$9.96
-$12.00 -$11.76
suffer output losses of between 3.5% and 5.2% by 2020, MO-Low MO-High
while output from energy intensive sectors fall between -$14.00
4.5% and 5.7%. In addition, the general shift away from
coal would result in a 31.2% to 31.6% reduction in coal
production and electricity production would fall by 18.1%
to 22.3% (Figure 6). These losses would be significantly Figure 5: Impact on Industrial Value of Shipments
higher by 2030 and would have a lasting impact on Percentage
Figure 5.Change from Baseline
Percent Change inIndustry
in Output by 2020 in 2020
Missouri’s economic base.
0%

Impact on Low Income Families5 -2% -1.6%


The impacts of L/W will be felt especially by the poor, who -2.4%
-4% -3.5%
spend more of their income on energy and other goods than -4.5%
-4.5%
other income brackets. By 2020, higher energy prices mean -6% -5.2% -5.0%
-5.7%
that low income families in Missouri (with average
incomes of $13,881) will spend between 20% and 23% of -8%
their income on energy under L/W compared to a projected MO Low MO High
17% without L/W. Others on fixed incomes, such as the -10%
elderly will also suffer disproportionately. MAN EIS CHEM FOOD

Impact on State Budgets6 Figure 6: Impact on Production


Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
The increases in Missouri’s energy costs under L/W will Sector in 2020
impact expenditures throughout the state. Specifically, 0%
Missouri’s 3,123 schools and universities and 163 hospitals -5%
will likely experience a 31% to 39% percent increase in -10%
expenditures by 2020 and a 107% to 146% increase by -15%
2030. For government entities, costs for services, including -20% -18.1%

public transportation and vehicle fleets, such as school -25% -22.3%

buses, will also rise under L/W. -30%


-35% -31.2% -31.6%
MO Low MO High
-40%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; FOOD = Food products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Montana
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-2
Under L/W, Montana would lose 3,972 to 5,975 jobs in -4
2020 and 10,935 to 14,557 jobs in 2030 (Figure 2). The
Thousands of Jobs

-3.97
-6
primary cause of job losses would be lower industrial -5.98
output due to higher energy prices, the high cost of -8
complying with required emissions cuts, and greater -10
competition from overseas manufacturers with lower -10.94
-12
energy costs.
-14
MT-Low MT-High
Decrease in Disposable Household Income -16
-14.56

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Montana would see disposable household Figure
(Annual Dollars 3. Loss
Lost of Disposable Income
per Household)
income reduced by $709 to $2,299 per year by 2020 and per Household
$2,918 to $5,321 by 2030 (Figure 3). 0 2020 2030

L/W’s Impact on Energy Prices -1,000 -709

Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Montana
D o lla r s

-2,299
would increase between 74% and 140% by 2030, while -3,000
-2,918
electricity prices would increase by 96% to 133%. Table 1
-4,000
shows the increase in electricity, gasoline, and natural gas
prices faced by a typical Montana household compared to -5,000
national household increases. Montana residents would pay MT Low MT High -5,321
between 113% and 154% more for their natural gas by -6,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
MT
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 23% 30%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 96% 133%
unproven technology, to capture and store CO2. To meet 2020 20% 67%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 140%
have to substitute high cost technologies, such as biomass Natural Gas 2020 28% 39%
and wind, for conventional generation. (Residential) 2030 113% 154%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Montana’s gross state product Figure 4.(Billion
to Baseline Loss in2007$)
Gross State Product
(GSP) would by between $365 and $506 million per year 2020 2030
$0.00
by 2020 and $1.3 and $1.6 billion by 2030 (Figure 4). -$0.20

B illio ns o f D o lla rs
-$0.40
Impact on Industry -$0.37
-$0.60 -$0.51
Montana’s major economic sectors will be affected by -$0.80
emission caps (Figure 5).4 The current two largest sectors,
-$1.00
petroleum and coal products manufacturing and wood
-$1.20
products manufacturing, show decreases in output of 22.1%
-$1.40
to 34.9% and 3.7% to 5.8%, respectively in 2020. All -$1.35
manufacturing sectors will suffer output losses of between -$1.60 MT-Low MT-High -$1.59
2.2% and 3.5% by 2020, while output from energy -$1.80
intensive sectors fall between 10.0% and 13.3%. In
addition, the general shift away from coal would result in a
38.9% to 43.0% reduction in coal production and electricity
production would fall by 2.1% to 3.5% (Figure 6). These
losses would be significantly higher by 2030 and would Figure 5: Impact on Industrial Value of Shipments
have a lasting impact on Montana’s economic base. Percentage
Figure 5.Change from Baseline
Percent Change in Industry
in Output by 2020 in 2020
0%
Impact on Low Income Families5 -2.2%
-3.5% -3.7%
The impacts of L/W will be felt especially by the poor, who -5.8%
-10% -10.0%
spend more of their income on energy and other goods than -13.3%
other income brackets. By 2020, higher energy prices mean -20%
that low income families in Montana (with average -22.1%
incomes of $11,541) will spend between 22% and 24% of -30%
their income on energy under L/W compared to a projected
19% without L/W. Others on fixed incomes, such as the MT Low MT High -34.9%
-40%
elderly will also suffer disproportionately.
MAN EIS PET WOOD
6
Impact on State Budgets Figure 6: Impact on Production
The increases in Montana’s energy costs under L/W will Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
impact expenditures throughout the state. Specifically, Sector in 2020
0%
Montana’s 967 schools and universities and 65 hospitals -2.1%
-3.5%
will likely experience a 20% to 24% percent increase in -10%
expenditures by 2020 and a 64% to 84% increase by 2030.
For government entities, costs for services, including public -20%
transportation and vehicle fleets, such as school buses, will -30%
also rise under L/W.
-40%
-38.9%
-43.0% MT Low MT High
-50%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; PET = Petroleum and coal products manufacturing; WOOD = Wood products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Nebraska
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands Figure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Nebraska would lose 7,541 to 11,344 jobs in
2020 and 18,837 to 25,074 jobs in 2030 (Figure 2). The
Thousands of Jobs

-7.54
-10
primary cause of job losses would be lower industrial -11.34
output due to higher energy prices, the high cost of -15
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -20 -18.84

energy costs.
-25
-25.07
NE-Low NE-High
Decrease in Disposable Household Income -30
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Nebraska would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $961 to $3,116 per year by 2020 and Figure 3.
(Annual Dollars Lossper
Lost of Disposable
Household) Income
$4,056 to $7,396 by 2030 (Figure 3). per Household
0
2020 2030
L/W’s Impact on Energy Prices -1,000
-961
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Nebraska -3,000
would increase between 73% and 140% by 2030, while
D o lla rs

-4,000 -3,116
electricity prices would increase by 124% to 153%. Table 1 -5,000
-4,056
shows the increase in electricity, gasoline, and natural gas
-6,000
prices faced by a typical Nebraska household compared to
-7,000
national household increases. Nebraska residents would
-8,000 -7,396
pay between 109% and 153% more for their natural gas by NE Low NE High
-9,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and NE
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 39%
would result in the electric industry shutting down most (Residential) 2030 124% 153%
carbon-based generation and/or using expensive, as yet 2020 21% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 73% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 38%
have to substitute high cost technologies, such as biomass
(Residential) 2030 109% 153%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Nebraska’s gross state product Figure 4: Annual Impact of GSP Relative
Figure(Billion
to Baseline 4. Loss2007$)
in Gross State Product
(GSP) by between $0.89 and $1.2 billion per year by 2020
2020 2030
and $3.3 and $3.7 billion by 2030 (Figure 4). $0.00
-$0.50

B illio ns o f D o lla rs
Impact on Industry -$1.00
-$0.89
Nebraska’s major economic sectors will be affected by -$1.50 -$1.24
emission caps (Figure 5).4 The current two largest sectors, -$2.00
computer and electronic product manufacturing and plastic -$2.50
and rubber products manufacturing, show decreases in -$3.00
output of 1.6% to 2.0% and 6.1% to 6.7%, respectively in -$3.50 -$3.29
2020. All manufacturing sectors will suffer output losses of -$4.00 NE-Low NE-High -$3.89
between 2.9% and 4.0% by 2020, while output from energy -$4.50
intensive sectors fall between 8.0% and 9.9%. Electricity
production would fall by between 9.6% and 10.0% (Figure
6). These losses would be significantly higher by 2030 and Figure 5: Impact on Industrial Value of Shipments
would have a lasting impact on Nebraska’s economic base. Figure 5. Percent
Percentage Change Change
frominBaseline
Output by in
Industry
2020in 2020
0%
Impact on Low Income Families5
-2.0% -1.6%
The impacts of L/W will be felt especially by the poor, who -5% -2.9%
-4.0%
spend more of their income on energy and other goods than -6.1% -6.7%
other income brackets. By 2020, higher energy prices mean -10% -8.0%
that low income families in Nebraska (with average -9.9%
incomes of $13,725) will spend between 21% and 23% of
-15%
their income on energy under L/W compared to a projected
18% without L/W. Others on fixed incomes, such as the NH Low NH High
elderly will also suffer disproportionately. -20%
MAN EIS COMP PLA
Impact on State Budgets6
The increases in Nebraska’s energy costs under L/W will Figure 6: Impact on Production
Figure 6. Percent Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
Nebraska’s 1,509 schools and universities and 101 0%
hospitals will likely experience a 31% to 39% percent -3%
increase in expenditures by 2020 and a 107% to 146%
increase by 2030. For government entities, costs for -6%
services, including public transportation and vehicle fleets,
-9%
such as school buses, will also rise under L/W. -9.6% -10.0%
-12%
NE Low NE High
-15%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; COMP = Computer and Electronic Products Manufacturing; PLA = Plastic and Rubber Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
Nevada
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55 Figure 2: Loss in Employment Relative to Baseline
and $64 per metric ton of CO2 (MT) by 2020 and could (Thousands of Jobs)
increase to between $227/MT and $271/MT by 2030.3 Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Nevada would lose 9,902 to 14,895 jobs in -10
2020 and 27,259 to 36,286 jobs in 2030 (Figure 2). The -9.90
Thousands of Jobs

primary cause of job losses would be lower industrial -15


-14.89
output due to higher energy prices, the high cost of -20
complying with required emissions cuts, and greater -25
competition from overseas manufacturers with lower -27.26
-30
energy costs.
-35
NV-Low NV-High
Decrease in Disposable Household Income -40
-36.29

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Nevada would see disposable household FigureLost
(Annual Dollars 3. Loss
perofHousehold)
Disposable Income
income reduced by $1,013 to $3,283 per year by 2020 and per Household
$4,167 to $7,598 by 2030 (Figure 3). 0
2020 2030
-1,000
L/W’s Impact on Energy Prices -1,013
-2,000
Most energy prices would rise under L/W, particularly coal, -3,000
oil, and natural gas. The price of gasoline in Nevada would
D o llars

-4,000 -3,283
increase between 74% and 140% by 2030, while electricity -4,167
-5,000
prices would increase by 96% to 133%. Table 1 shows the
-6,000
increase in electricity, gasoline, and natural gas prices faced
by a typical Nevada household compared to national -7,000
household increases. Nevada residents would pay between -8,000 -7,598
NV Low NV High
113% and 154% more for their natural gas by 2030. -9,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
NV
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 23% 30%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 96% 133%
unproven technology, to capture and store CO2. To meet 2020 20% 67%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 140%
have to substitute high cost technologies, such as biomass Natural Gas 2020 28% 39%
and wind, for conventional generation. (Residential) 2030 113% 154%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Nevada’s gross state product (GSP) to Baseline
Figure(Billion
4. Loss 2007$)
in Gross State Product
by between $1.3 and $1.8 billion per year by 2020 and $4.8 2020 2030
and $5.7 billion by 2030 (Figure 4). $0.00

-$1.00

B illio ns o f D o lla rs
Impact on Industry -$2.00 -$1.30
Nevada’s major economic sectors will be affected by -$1.81
-$3.00
emission caps (Figure 5).4 The current two largest sectors,
miscellaneous manufacturing and non-metal mineral -$4.00
products manufacturing, show decreases in output of 0.0% -$5.00
to 1.2% and 11.1% to 12.8%, respectively in 2020. All -$4.81
-$6.00 -$5.68
manufacturing sectors will suffer output losses of between NV-Low NV-High
2.2% and 3.5% by 2020, while output from energy -$7.00
intensive sectors fall between 10.0% and 13.3%. Nevada’s
coal production would fall between 18.5% and 22.1%, Figure 5: Impact on Industrial Value of Shipments
although due to its low cost of generation, electricity supply Percentage Change from Baseline in 2020
Figure 5. Percent Change in Output by Industry in 2020
could rise slightly over the baseline forecast (Figure 6).
These continued losses will have a lasting effect on the 0%
economic base of Nevada. -1.2%
-2.2%
-5% -3.5%
Impact on Low Income Families5
The impacts of L/W will be felt especially by the poor, who -10%
-10.0%
spend more of their income on energy and other goods than -11.1%
other income brackets. By 2020, higher energy prices mean -13.3% -12.8%
-15%
that low income families in Nevada (with average incomes NV Low NV High
of $17,156) will spend between 15% and 16% of their -20%
income on energy under L/W compared to a projected 13% MAN EIS MISC MIN
without L/W. Others on fixed incomes, such as the elderly
will also suffer disproportionately.

Impact on State Budgets6 Figure 6:6.Impact


Figure onChange
Percent Production
in Production by
Percentage Change from
Sector Baseline in 2020
in 2020
The increases in Nevada’s energy costs under L/W will 0%
impact expenditures throughout the state. Specifically,
Nevada’s 693 schools and universities and 58 hospitals will -1%
likely experience a 20% to 24% percent increase in
-2%
expenditures by 2020 and a 64% to 84% increase by 2030. -2.1%
For government entities, costs for services, including public -3%
transportation and vehicle fleets, such as school buses, will -3.5%
-4%
also rise under L/W.
NV Low NV High
-5%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MISC = Miscellaneous Manufacturing; MIN = Non-Metal Mineral Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
New Hampshire
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55 Figure 2: Loss in Employment Relative to Baseline
and $64 per metric ton of CO2 (MT) by 2020 and could (Thousands of Jobs)
increase to between $227/MT and $271/MT by 2030.3 Figure 2. Loss in Employment
0
2020 2030
Impact on Jobs -2
.

Under L/W, New Hampshire would lose 5,496 to 8,268 -4


jobs in 2020 and 13,442 to 17,893 jobs in 2030 (Figure 2).
Thousands of Jobs

-6 -5.50

The primary cause of job losses would be lower industrial -8


-8.27
output due to higher energy prices, the high cost of -10
complying with required emissions cuts, and greater -12
competition from overseas manufacturers with lower -14 -13.44
energy costs. -16
-18
NH-Low NH-High -17.89
Decrease in Disposable Household Income -20
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. New Hampshire would see disposable Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
household income reduced by $1,157 to $3,749 per year by (Annual Dollars Lost per Household)
per Household
2020 and $5,040 to $9,190 by 2030 (Figure 3). 2020 2030
0

L/W’s Impact on Energy Prices -2,000 -1,157


Most energy prices would rise under L/W, particularly coal,
-4,000
oil, and natural gas. The price of gasoline in New -3,749
D o lla rs

Hampshire would increase between 74% and 144% by -6,000 -5,040


2030, while electricity prices would increase by 54% to
81%. Table 1 shows the increase in electricity, gasoline, -8,000
and natural gas prices faced by a typical New Hampshire -10,000 -9,190
household compared to national household increases. New
NH Low NH High
Hampshire residents would pay between 86% and 121% -12,000
more for their natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W NH
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 18% 22%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 54% 81%
the stringent goals of L/W, the electric industry would also
2020 20% 67%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 74% 144%
Natural Gas 2020 20% 28%
Impact on Economic Growth (Residential) 2030 86% 121%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce New Hampshire’s gross state Figure 4: Annual Impact of GSP Relative
product (GSP) by between $673 and $932 million per year to Baseline
Figure (Billion 2007$)
4. Loss in Gross State Product
by 2020 and $2.5 and $2.9 billion by 2030 (Figure 4). 2020 2030
$0.00

-$0.50

B illio ns o f D o lla rs
Impact on Industry
-$1.00 -$0.67
New Hampshire’s major economic sectors will be affected -$0.93
by emission caps (Figure 5).4 The current two largest -$1.50
sectors, computer and electronic product manufacturing -$2.00
and plastic and rubber products manufacturing, show
decreases in output of 1.6% to 2.0% and 6.1% to 6.7%, -$2.50
-$2.48
respectively in 2020. All manufacturing sectors will suffer -$3.00 -$2.93
output losses of between 2.9% and 4.0% by 2020, while NH-Low NH-High
-$3.50
output from energy intensive sectors fall between 8.0% and
9.9%. Electricity production would fall by between 12.0%
and 9.2% (Figure 6). These losses would be significantly Figure 5: 5.Impact
Figure Percenton Industrial
Change Value
in Output of Shipments
by Industry in
higher by 2030 and would have a lasting impact on New Percentage Change from Baseline in 2020
2020
Hampshire’s economic base. 0%
-2.0% -1.6%
Impact on Low Income Families5 -5% -2.9%
-4.0%
The impacts of L/W will be felt especially by the poor, who -6.1% -6.7%
spend more of their income on energy and other goods than -10% -8.0%
-9.9%
other income brackets. By 2020, higher energy prices mean
that low income families in New Hampshire (with average -15%
incomes of $18,248) will spend between 18% and 21% of
NH Low NH High
their income on energy under L/W compared to a projected -20%
16% without L/W. Others on fixed incomes, such as the MAN EIS COMP PLA
elderly will also suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact on Production


Figure 6. Percent Change in Production by
The increases in New Hampshire’s energy costs under L/W Percentage Change from Baseline in 2020
Sector in 2020
will impact expenditures throughout the state. Specifically, 0%
New Hampshire’s 674 schools and universities and 33
hospitals will likely experience a 28% to 38% percent -3%
increase in expenditures by 2020 and an 88% to 127% -6%
increase by 2030. For government entities, costs for
services, including public transportation and vehicle fleets, -9%
-9.2%
such as school buses, will also rise under L/W.
-12% -12.0%
NH Low NH High
-15%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; COMP = Computer and Electronic Products Manufacturing; PLA = Plastic and Rubber Products
Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
New Jersey
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55 Figure 2: Loss in Employment Relative to Baseline
and $64 per metric ton of CO2 (MT) by 2020 and could (Thousands of Jobs)
increase to between $227/MT and $271/MT by 2030.3 Figure 2. Loss in Employment
0
2020 2030
Impact on Jobs
.

-20
Under L/W, New Jersey would lose 31,154 to 46,863 jobs
in 2020 and 74,132 to 98,681 jobs in 2030 (Figure 2). The
Thousands of Jobs

-31.15
-40
primary cause of job losses would be lower industrial -46.86
output due to higher energy prices, the high cost of -60
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -80 -74.13

energy costs.
-100
-98.68
NJ-Low NJ-High
Decrease in Disposable Household Income -120
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. New Jersey would see disposable household Figure 3.
(Annual Dollars Loss
Lost of Household)
per Disposable Income
income reduced by $1,381 to $4,478 per year by 2020 and per Household
$5,854 to $10,675 by 2030 (Figure 3). 0
2020 2030

L/W’s Impact on Energy Prices -2,000 -1,381


Most energy prices would rise under L/W, particularly coal, -4,000
oil, and natural gas. The price of gasoline in New Jersey
D ollars

-4,478
would increase between 74% and 143% by 2030, while -6,000
-5,854
electricity prices would increase by 78% to 113%. Table 1
-8,000
shows the increase in electricity, gasoline, and natural gas
prices faced by a typical New Jersey household compared -10,000
to national household increases. New Jersey residents NJ Low NJ High -10,675
would pay between 93% and 133% more for their natural -12,000
gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W NJ
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 22% 26%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 78% 113%
the stringent goals of L/W, the electric industry would also
2020 20% 66%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 74% 143%
Natural Gas 2020 23% 32%
Impact on Economic Growth (Residential) 2030 93% 133%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce New Jersey’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $5.4 and $7.5 billion per year by 2020 to Baseline
Figure(Billion
4. Loss2007$)
in Gross State Product
and $19.9 and $23.4 billion by 2030 (Figure 4).
2020 2030
$0.00
Impact on Industry -$5.00

B illio ns o f D o lla rs
New Jersey’s major economic sectors will be affected by -$5.38
-$10.00 -$7.46
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and food products manufacturing, -$15.00
show decreases in output of 5.4% to 6.0% and 1.4% to -$20.00
2.4%, respectively in 2020. All manufacturing sectors will -$19.86
-$25.00 -$23.44
suffer output losses of between 2.3% and 4.1% by 2020,
while output from energy intensive sectors fall between -$30.00
NJ-Low NJ-High
8.2% and 10.5%. Electricity production would fall by -$35.00
between 0.4% and 1.6% (Figure 6). These losses would be Figure 5: Impact on Industrial Value of Shipments
significantly higher by 2030 and would have a lasting Percentage
FigureChange
5. Percentfrom Baseline
Change in Outputinby2020
Industry in 2020
impact on New Jersey’s economic base.
0%
5
Impact on Low Income Families -1.4%
-3% -2.3% -2.4%
The impacts of L/W will be felt especially by the poor, who
-4.1%
spend more of their income on energy and other goods than -6% -5.4% -6.0%
other income brackets. By 2020, higher energy prices mean
that low income families in New Jersey (with average -9% -8.2%
incomes of $17,156) will spend between 16% and 18% of -10.5%
-12%
their income on energy under L/W compared to a projected NJ Low NJ High
14% without L/W. Others on fixed incomes, such as the -15%
elderly will also suffer disproportionately. MAN EIS CHEM FOOD

Impact on State Budgets6


Figure 6: Impact on Production
The increases in New Jersey’s energy costs under L/W will
Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
impact expenditures throughout the state. Specifically, New
Sector in 2020
Jersey’s 3,497 schools and universities and 122 hospitals 0.0%
will likely experience a 28% to 38% percent increase in
-0.5% -0.4%
expenditures by 2020 and an 88% to 127% increase by
2030. For government entities, costs for services, including -1.0%
public transportation and vehicle fleets, such as school
buses, will also rise under L/W. -1.5%
-1.6%
-2.0%
NJ Low NJ High
-2.5%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; FOOD = Food Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
New Mexico
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55 Figure 2: Loss in Employment Relative to Baseline
and $64 per metric ton of CO2 (MT) by 2020 and could (Thousands of Jobs)
increase to between $227/MT and $271/MT by 2030.3 Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, New Mexico would lose 7,399 to 11,130 jobs
in 2020 and 20,370 to 27,116 jobs in 2030 (Figure 2). The -7.40
Thousands of Jobs

-10
primary cause of job losses would be lower industrial -11.13

output due to higher energy prices, the high cost of -15


complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -20
-20.37
energy costs.
-25

NM-Low NM-High
Decrease in Disposable Household Income -30
-27.12

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. New Mexico would see disposable Figure
(Annual Dollars 3. Loss
Lost of Disposable Income
per Household)
household income reduced by $727 to $2,356 per year by per Household
2020 and $2,990 to $5,452 by 2030 (Figure 3). 0
2020 2030

L/W’s Impact on Energy Prices -1,000 -727

Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in New Mexico -2,356
D o lla rs

-3,000
would increase between 74% and 140% by 2030, while -2,990
electricity prices would increase by 96% to 133%. Table 1 -4,000
shows the increase in electricity, gasoline, and natural gas -5,000
prices faced by a typical New Mexico household compared -5,452
-6,000
to national household increases. New Mexico residents NM Low NM High
would pay between 113% and 154% more for their natural -7,000
gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and NM
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 23% 30%
would result in the electric industry shutting down most (Residential) 2030 96% 133%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 39%
have to substitute high cost technologies, such as biomass
(Residential) 2030 113% 154%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce New Mexico’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $0.8 and $1.2 billion per year by 2020 to Baseline
Figure(Billion
4. Loss2007$)
in Gross State Product
and $3.1 and $3.6 billion by 2030 (Figure 4). 2020 2030
$0.00
-$0.50
Impact on Industry

B illio ns o f D o lla rs
-$1.00
-$0.84
New Mexico’s major economic sectors will be affected by -$1.50 -$1.16
emission caps (Figure 5).4 The current two largest sectors, -$2.00
computer and electronic product manufacturing and -$2.50
petroleum and coal productions manufacturing, show -$3.00
-$3.50 -$3.09
decreases in output of 1.6% to 1.9% and 22.1% to 34.9%,
-$4.00 -$3.65
respectively in 2020. All manufacturing sectors will suffer
-$4.50 NM-Low NM-High
output losses of between 2.2% and 3.5% by 2020, while -$5.00
output from energy intensive sectors fall between 10.0%
and 13.3%. In addition, the general shift away from coal
would result in a 43.0% to 38.9% reduction in coal Figure 5: Impact on Industrial Value of Shipments
production and electricity production would fall by 14.6% Percentage
Figure 5.Change from Baseline
Percent Change in Industry
in Output by 2020 in 2020
to 9.9% (Figure 6). These losses would be significantly
higher by 2030 and would have a lasting impact on New 0%
Mexico’s economic base.
-2.2%
-3.5% -1.9% -1.6%
-10% -10.0%
5
Impact on Low Income Families -13.3%
The impacts of L/W will be felt especially by the poor, who -20%
-22.1%
spend more of their income on energy and other goods than
other income brackets. By 2020, higher energy prices mean -30%
that low income families in New Mexico (with average NM Low NM High -34.9%
incomes of $12,165) will spend between 20% and 23% of -40%
their income on energy under L/W compared to a projected MAN EIS COMP PET
18% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact


Figure on Production
6. Percent Change in Production by
The increases in New Mexico’s energy costs under L/W Percentage Change frominBaseline
Sector 2020 in 2020
0%
will impact expenditures throughout the state. Specifically,
New Mexico’s 1,093 schools and universities and 58 -10%
-9.9%
hospitals will likely experience a 20% to 24% percent -14.6%
increase in expenditures by 2020 and a 64% to 84% -20%
increase by 2030. For government entities, costs for
-30%
services, including public transportation and vehicle fleets,
such as school buses, will also rise under L/W. -40%
-38.9%
-43.0% NM Low NM High
-50%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; COMP = Computer and Electronic Products Manufacturing; PET = Petroleum and Coal Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
New York
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)
2. Loss in Employment
2020 2030
0
Impact on Jobs
.

Under L/W, New York would lose 65,728 to 98,873 jobs in -50
2020 and 156,404 to 208,197 jobs in 2030 (Figure 2). The
Thousands of Jobs

-65.73

primary cause of job losses would be lower industrial -100


-98.87
output due to higher energy prices, the high cost of
complying with required emissions cuts, and greater -150
competition from overseas manufacturers with lower -156.40

energy costs. -200


-208.20
NY-Low NY-High
Decrease in Disposable Household Income -250
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. New York would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $1,211 to $3,927 per year by 2020 and (Annual Figure
Dollars3. Loss
Lost of
perDisposable Income
Household)
$5,134 to $9,362 by 2030 (Figure 3). per Household
0 2020 2030
L/W’s Impact on Energy Prices
-2,000 -1,211
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in New York -4,000
would increase between 74% and 143% by 2030, while -3,927
D o llars

-6,000 -5,134
electricity prices would increase by 78% to 113%. Table 1
shows the increase in electricity, gasoline, and natural gas -8,000
prices faced by a typical New York household compared to
national household increases. New York residents would -10,000 -9,362
pay between 93% and 133% more for their natural gas by NY Low NY High
-12,000
2030.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W NY
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 22% 26%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 78% 113%
the stringent goals of L/W, the electric industry would also
2020 20% 66%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 74% 143%
Natural Gas 2020 23% 32%
Impact on Economic Growth (Residential) 2030 93% 133%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce New York’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $12 and $16.6 billion per year by 2020 to Baseline
Figure 4.(Billion
Loss in 2007$)
Gross State Product
and $44.2 and $52.1 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$10.00

B illio ns o f D o lla rs
-$11.97
New York’s major economic sectors will be affected by -$20.00 -$16.59
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and food products manufacturing, -$30.00

show decreases in output of 5.4% to 6.0% and 1.4% to -$40.00


2.4%, respectively in 2020. All manufacturing sectors will
-$50.00 -$44.16
suffer output losses of between 2.3% and 4.1% by 2020,
NY-Low NY-High -$52.14
while output from energy intensive sectors fall between -$60.00
8.2% and 10.5%. Electricity production would fall by
between 17.8% and 21.1% (Figure 6). These losses would
be significantly higher by 2030 and would have a lasting Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
impact on New York’s economic base. Percentage Change from Baseline in 2020
0%
Impact on Low Income Families5 -1.4%
-3% -2.3% -2.4%
The impacts of L/W will be felt especially by the poor, who
-4.1%
spend more of their income on energy and other goods than -6% -5.4%
-6.0%
other income brackets. By 2020, higher energy prices mean
that low income families in New York (with average -9% -8.2%
incomes of $13,569) will spend between 20% and 22% of -12% -10.5%
their income on energy under L/W compared to a projected NY Low NY High
17% without L/W. Others on fixed incomes, such as the -15%
elderly will also suffer disproportionately. MAN EIS CHEM FOOD

Impact on State Budgets6


The increases in New York’s energy costs under L/W will Figure 6:6.Impact
Figure onChange
Percent Production
in Production by
impact expenditures throughout the state. Specifically, New Percentage Change from Baseline in 2020
Sector in 2020
York’s 6,940 schools and universities and 282 hospitals 0%
will likely experience a 28% to 38% percent increase in -5%
expenditures by 2020 and an 88% to 127% increase by
-10%
2030. For government entities, costs for services, including
public transportation and vehicle fleets, such as school -15%
buses, will also rise under L/W. -20% -17.8%
-21.1%
-25%
NY Low NY High
-30%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; FOOD = Food products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
North Carolina
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55 Figure 2: Loss in Employment Relative to Baseline
and $64 per metric ton of CO2 (MT) by 2020 and could (Thousands of Jobs)
Figure 2. Loss in Employment
increase to between $227/MT and $271/MT by 2030.3
2020 2030
0
Impact on Jobs
.

-20
Under L/W, North Carolina would lose 39,065 to 58,764 -40
jobs in 2020 and 110,232 to 146,735 jobs in 2030 (Figure -39.06
Thousands of Jobs

-60
2). The primary cause of job losses would be lower -58.76

industrial output due to higher energy prices, the high cost -80
of complying with required emissions cuts, and greater -100
competition from overseas manufacturers with lower
-120 -110.23
energy costs.
-140
NC-Low NC-High
Decrease in Disposable Household Income -160
-146.74

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. North Carolina would see disposable
household income reduced by $836 to $2,712 per year by Figure 3: Household Impact Relative to Baseline
Figure 3. Loss of Disposable Income
2020 and $3,525 to $6,428 by 2030 (Figure 3). (Annual Dollars Lost per
per Household
Household)

L/W’s Impact on Energy Prices 0


2020 2030
Most energy prices would rise under L/W, particularly coal, -1,000 -836
oil, and natural gas. The price of gasoline in North Carolina -2,000
would increase between 74% and 145% by 2030, while -3,000
D ollars

-2,712
electricity prices would increase by 103% to 135%. Table 1 -3,525
-4,000
shows the increase in electricity, gasoline, and natural gas
prices faced by a typical North Carolina household -5,000
compared to national household increases. North Carolina -6,000
residents would pay between 91% and 131% more for their -7,000 -6,428
natural gas by 2030. NC Low NC High
-8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and
industry); however, as the largest emitter of GHGs, the Table 1: Change in Energy Prices at Household Level
primary impact would fall on the electric sector. L/W (% change from baseline)
would result in the electric industry shutting down most NC
carbon-based generation and/or using expensive, as yet Sector Year Low High
unproven technology, to capture and store CO2. To meet Electricity 2020 30% 39%
the stringent goals of L/W, the electric industry would also (Residential) 2030 103% 135%
have to substitute high cost technologies, such as biomass 2020 21% 70%
and wind, for conventional generation. Gasoline (Retail)
2030 74% 145%
Natural Gas 2020 23% 32%
Impact on Economic Growth
(Residential) 2030 91% 131%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce North Carolina’s gross state product
(GSP) by between $4.3 and $6 billion per year by 2020 and Figure 4: Annual Impact of GSP Relative
$16 and $18.9 billion by 2030 (Figure 4). toFigure
Baseline (Billion
4. Loss 2007$)
in Gross State Product
2020 2030
Impact on Industry $0.00
-$2.00
North Carolina’s major economic sectors will be affected -$4.00

Billio ns o f D o lla rs
by emission caps (Figure 5).4 The current two largest -$6.00 -$4.34
sectors, chemical manufacturing and food products -$8.00 -$6.01
manufacturing, show decreases in output of 7.2% to 8.2% -$10.00
-$12.00
and 1.6% to 2.4%, respectively in 2020. All manufacturing
-$14.00
sectors will suffer output losses of between 3.2% and 4.4% -$16.00
by 2020, while output from energy intensive sectors fall -$18.00 -$15.99
between 7.8% and 9.1%. A general shift in nationwide -$20.00 NC-Low NC-High -$18.88
generation patterns would result in North Carolina’s -$22.00
electricity production increasing by between 1.5% and
0.9% by 2020 (Figure 6). Figure 5: Impact on Industrial Value of Shipments
Percentage Change
Figure 5. Percent frominBaseline
Change Output by in 2020in 2020
Industry
Impact on Low Income Families5 0%
The impacts of L/W will be felt especially by the poor, who
-3% -1.6%
spend more of their income on energy and other goods than -2.4%
-3.2%
other income brackets. By 2020, higher energy prices mean -4.4%
-6%
that low income families in North Carolina (with average
incomes of $14,193) will spend between 18% and 20% of -7.8% -7.2%
-9% -8.2%
their income on energy under L/W compared to a projected -9.1%
16% without L/W. Others on fixed incomes, such as the -12%
elderly will also suffer disproportionately. NC Low NC High
-15%
Impact on State Budgets6 MAN EIS CHEM FOOD
The increases in North Carolina’s energy costs under L/W Figure 6: Impact on Production
will impact expenditures throughout the state. Specifically, Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
North Carolina’s 3,139 schools and universities and 154 Sector in 2020
hospitals will likely experience a 28% to 35% percent 2.0%
increase in expenditures by 2020 and a 91% to 123% 1.5%
increase by 2030. For government entities, costs for 1.5%
services, including public transportation and vehicle fleets,
1.0% 0.9%
such as school buses, will also rise under L/W.

0.5%
NC Low NC High
0.0%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; Food = Food Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
North Dakota
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs -1
.

Under L/W, North Dakota would lose 2,732 to 4,110 jobs -2


in 2020 and 6,825 to 9,085 jobs in 2030 (Figure 2). The -3
Thousands of Jobs

-2.73
primary cause of job losses would be lower industrial -4
-4.11
output due to higher energy prices, the high cost of -5
complying with required emissions cuts, and greater -6
competition from overseas manufacturers with lower -7
-6.83
energy costs. -8
-9
ND-Low ND-High
Decrease in Disposable Household Income -10
-9.09

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. North Dakota would see disposable FigureLost
(Annual Dollars 3. Loss
perofHousehold)
Disposable Income
household income reduced by $840 to $2,722 per year by per Household
2020 and $3,542 to $6,459 by 2030 (Figure 3). 0 2020 2030
-1,000
L/W’s Impact on Energy Prices -840
-2,000
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in North Dakota -3,000
-2,722
D o lla r s

would increase between 73% and 140% by 2030, while -4,000 -3,542
electricity prices would increase by 124% to 153%. Table 1 -5,000
shows the increase in electricity, gasoline, and natural gas -6,000
prices faced by a typical North Dakota household compared
-7,000 -6,459
to national household increases. North Dakota residents ND Low ND High
would pay between 109% and 153% more for their natural -8,000
gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W ND
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 31% 39%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 124% 153%
the stringent goals of L/W, the electric industry would also
2020 21% 67%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 73% 140%
Natural Gas 2020 28% 38%
Impact on Economic Growth (Residential) 2030 109% 153%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce North Dakota’s gross state product
Figure 4: Annual Impact of GSP Relative
(GSP) by between $303 and $420 million per year by 2020
to Baseline (Billion
Figure 4. Loss2007$)
in Gross State Product
and $1.1 and $1.3 billion by 2030 (Figure 4).
2020 2030
$0.00
Impact on Industry -$0.20

B illio ns o f D o lla r s
North Dakota’s major economic sectors will be affected by -$0.40 -$0.30
emission caps (Figure 5).4 The current two largest sectors, -$0.60 -$0.42
machinery manufacturing and non-metal products
-$0.80
manufacturing, show decreases in output of 5.3% (low and
high give same value) and 10.0% to 11.5%, respectively in -$1.00

2020. All manufacturing sectors will suffer output losses of -$1.20 -$1.12
between 3.5% and 5.2% by 2020, while output from energy -$1.40 -$1.32
ND-Low ND-High
intensive sectors fall between 4.5% and 5.7%. In addition, -$1.60
the general shift away from coal would result in a 31.2% to
31.6% reduction in coal production and electricity Figure 5: Impact on Industrial Value of Shipments
production would fall by 9.6% to 10.0% (Figure 6). These Percentage
Figure 5.Change from Baseline
Percent Change in Industry
in Output by 2020 in 2020
losses would be significantly higher by 2030 and would
have a lasting impact on North Dakota’s economic base. 0%

-3%
Impact on Low Income Families5 -3.5%
-6% -4.5%
The impacts of L/W will be felt especially by the poor, who -5.2% -5.7% -5.3% -5.3%
spend more of their income on energy and other goods than
-9%
other income brackets. By 2020, higher energy prices mean
-10.0%
that low income families in North Dakota (with average -12% -11.5%
incomes of $13,881) will spend between 20% and 23% of ND Low ND High
their income on energy under L/W compared to a projected -15%
17% without L/W. Others on fixed incomes, such as the MAN EIS MACH MIN
elderly will also suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact on Production


Percentage
Figure 6.Change
Percentfrom Baseline
Change in 2020 by
in Production
The increases in North Dakota’s energy costs under L/W Sector in 2020
will impact expenditures throughout the state. Specifically, 0%
North Dakota’s 613 schools and universities and 54 -5%
hospitals will likely experience a 31% to 39% percent -10% -9.6% -10.0%
increase in expenditures by 2020 and a 107% to 146% -15%
increase by 2030. For government entities, costs for -20%
services, including public transportation and vehicle fleets, -25%
such as school buses, will also rise under L/W. -30%
-35% -31.2% -31.6%
ND Low ND High
-40%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MACH = Machinery Manufacturing; MIN = Non-Metal Mineral Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Ohio
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands Figure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-20
Under L/W, Ohio would lose 43,926 to 66,077 jobs in 2020
-40
and 107,454 to 143,037 jobs in 2030 (Figure 2). The
Thousands of Jobs

-43.93
primary cause of job losses would be lower industrial -60
output due to higher energy prices, the high cost of -80
-66.08

complying with required emissions cuts, and greater


-100
competition from overseas manufacturers with lower
-107.45
energy costs. -120

-140
Decrease in Disposable Household Income -160
OH-Low OH-High -143.04

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Ohio would see disposable household
Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
income reduced by $902 to $2,924 per year by 2020 and
(Annual Dollars LostperperHousehold
Household)
$3,739 to $6,819 by 2030 (Figure 3).
0 2020 2030
L/W’s Impact on Energy Prices -1,000
-902
Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Ohio would -3,000
increase between 72% and 141% by 2030, while electricity
D ollars

-2,924
-4,000
prices would increase by 126% to 177%. Table 1 shows the -3,739
increase in electricity, gasoline, and natural gas prices faced -5,000
by a typical Ohio household compared to national -6,000
household increases. Ohio residents would pay between -7,000
-6,819
112% and 160% more for their natural gas by 2030. -8,000
OH Low OH High

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Table 1: Change in Energy Prices at Household Level
(% change from baseline)
Factors Contributing to Higher Electricity Prices OH
L/W would reduce GHG emissions from all sectors of the Sector Year Low High
economy (transportation, residential, commercial, and Electricity 2020 31% 38%
industry); however, as the largest emitter of GHGs, the (Residential) 2030 126% 177%
primary impact would fall on the electric sector. L/W 2020 20% 68%
would result in the electric industry shutting down most Gasoline (Retail)
2030 72% 141%
carbon-based generation and/or using expensive, as yet
Natural Gas 2020 29% 40%
unproven technology, to capture and store CO2. To meet
(Residential) 2030 112% 160%
the stringent goals of L/W, the electric industry would also
have to substitute high cost technologies, such as biomass
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Ohio’s gross state product (GSP) by Figure 4: Annual Impact of GSP Relative
between $5.6 and $7.7 billion per year by 2020 and $20.5 to Baseline (Billion
Figure 4. Loss2007$)
in Gross State Product
2020 2030
and $24.2 billion by 2030 (Figure 4). $0.00

-$5.00

Billions of Dollars
Impact on Industry -$5.56
-$10.00 -$7.71
Ohio’s major economic sectors will be affected by emission
caps (Figure 5).4 The current two largest sectors, chemical -$15.00

manufacturing and transportation equipment -$20.00


-$20.52
manufacturing, show decreases in output of 4.9% to 5.4% -$25.00 -$24.23
and 6.2% to 13.8%, respectively in 2020. All OH-Low OH-High
-$30.00
manufacturing sectors will suffer output losses of between
4% and 7.3% by 2020, while output from energy intensive
sectors fall between 6.8% and 8.6%. In addition, the
general shift away from coal would result in a 44.2% to FigureFigure
5: Impact onChange
5. Percent Industrial Value
in Output of Shipments
by Industry in 2020
47.6% reduction in coal production and electricity Percentage Change from Baseline in 2020
0%
production would fall by 17.6% to 18.7% (Figure 6). These
losses would be significantly higher by 2030 and would
have a lasting impact on Ohio’s economic base. -5% -4.0% -4.9%
-5.4%
-6.8% -6.2%
-7.3%
Impact on Low Income Families 5 -10% -8.6%

The impacts of L/W will be felt especially by the poor, who


-15% -13.8%
spend more of their income on energy and other goods than
other income brackets. By 2020, higher energy prices mean OH Low OH High
that low income families in Ohio (with average incomes of -20%
$13,725) will spend between 20% and 22% of their income MAN EIS CHEM TRAN
on energy under L/W compared to a projected 17% without
L/W. Others on fixed incomes, such as the elderly will also
suffer disproportionately. Figure
Figure 6:
6. Impact on Production
Percent Change in Production by Sector in
Percentage Change from 2020Baseline in 2020
Impact on State Budgets6 0%
The increases in Ohio’s energy costs under L/W will -10%
impact expenditures throughout the state. Specifically, -20% -17.6% -18.7%
Ohio’s 5,204 schools and universities and 241 hospitals
-30%
will likely experience a 31% to 39% percent increase in
expenditures by 2020 and a 107% to 146% increase by -40%
2030. For government entities, costs for services, including -50% -44.2%
-47.6%
public transportation and vehicle fleets, such as school -60%
OH Low OH High
buses, will also rise under L/W.
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; TRAN = Transportation equipment manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Oklahoma
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Oklahoma would lose 14,327 to 21,551 jobs in
2020 and 38,782 to 51,625 jobs in 2030 (Figure 2). The -14.33
Thousands of Jobs

-20
primary cause of job losses would be lower industrial -21.55
output due to higher energy prices, the high cost of -30
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -40
-38.78
energy costs.
-50
-51.62
OK-Low OK-High
Decrease in Disposable Household Income -60
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Oklahoma would see disposable household Figure 3: Household
Figure 3. Loss Impact Relative
of Disposable to Baseline
Income
income reduced by $810 to $2,625 per year by 2020 and (Annual Dollars Lost per Household)
per Household
$3,409 to $6,216 by 2030 (Figure 3). 0 2020 2030

L/W’s Impact on Energy Prices -1,000 -810


Most energy prices would rise under L/W, particularly coal, -2,000
oil, and natural gas. The price of gasoline in Oklahoma
D ollars

-3,000 -2,625
would increase between 76% and 147% by 2030, while
-3,409
electricity prices would increase by 101% to 145%. Table 1 -4,000
shows the increase in electricity, gasoline, and natural gas -5,000
prices faced by a typical Oklahoma household compared to
-6,000
national household increases. Oklahoma residents would
OK Low OK High -6,216
pay between 101% and 145% more for their natural gas by -7,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W OK
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 32% 35%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 101% 145%
the stringent goals of L/W, the electric industry would also
2020 21% 71%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 76% 147%
Natural Gas 2020 25% 36%
Impact on Economic Growth (Residential) 2030 101% 145%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Oklahoma’s gross state product
(GSP) by between $1.5 and $2.1 billion per year by 2020 Figure 4: Annual Impact of GSP Relative
and $5.5 and $6.5 billion by 2030 (Figure 4). to Baseline
Figure 4.(Billion
Loss in2007$)
Gross State Product
2020 2030
Impact on Industry $0.00
Oklahoma’s major economic sectors will be affected by -$1.00
emission caps (Figure 5).4 The current two largest sectors,

B illio ns o f D o lla rs
-$2.00 -$1.49
machinery manufacturing and plastic and rubber products -$2.07
-$3.00
manufacturing, show decreases in output of 3.9% to 5.4%
and 5.7% to 6.6%, respectively in 2020. All manufacturing -$4.00

sectors will suffer output losses of between 2.6% and 4.2% -$5.00
by 2020, while output from energy intensive sectors fall -$6.00 -$5.50
between 2.2% and 4.3%. In addition, the general shift away -$6.49
-$7.00
from coal would result in a 37.5% to 36.1% reduction in OK-Low OK-High
-$8.00
coal production and electricity production would fall by
4.1% to 6.5% (Figure 6). These losses would be
significantly higher by 2030 and would have a lasting Figure 5: Impact on Industrial Value of Shipments
impact on Oklahoma’s economic base. Percentage Change
Figure 5. Percent frominBaseline
Change Output byin 2020 in 2020
Industry

0%
Impact on Low Income Families5
-2%
The impacts of L/W will be felt especially by the poor, who -2.2%
-2.6%
spend more of their income on energy and other goods than -4%
other income brackets. By 2020, higher energy prices mean -4.2% -4.3% -3.9%
that low income families in Oklahoma (with average -6% -5.4% -5.7%
incomes of $11,541) will spend between 23% and 26% of -6.6%
their income on energy under L/W compared to a projected -8%
OK Low OK High
20% without L/W. Others on fixed incomes, such as the -10%
elderly will also suffer disproportionately.
MAN EIS MACH PLA
6
Impact on State Budgets
Figure 6: Impact on Production
The increases in Oklahoma’s energy costs under L/W will Figure 6. Percent
Percentage ChangeChange in Production
from Baseline in 2020by
impact expenditures throughout the state. Specifically, Sector in 2020
0%
Oklahoma’s 2,014 schools and universities and 167 -5% -4.1%
hospitals will likely experience a 28% to 35% percent -10% -6.5%
increase in expenditures by 2020 and a 91% to 123% -15%
increase by 2030. For government entities, costs for -20%
services, including public transportation and vehicle fleets, -25%
such as school buses, will also rise under L/W. -30%
-35%
-40% -37.5% -36.1%
OK Low OK High
-45%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MACH = Machinery Manufacturing; PLA = Plastic and Rubber Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Oregon
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands ofFigure
Jobs) 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-10
Under L/W, Oregon would lose 13,651 to 20,535 jobs in
-13.65
2020 and 35,483 to 47,233 jobs in 2030 (Figure 2). The
Thousands of Jobs

-20
primary cause of job losses would be lower industrial -20.53

output due to higher energy prices, the high cost of -30


complying with required emissions cuts, and greater
-35.48
competition from overseas manufacturers with lower -40

energy costs.
-50 -47.23

OR-Low OR-High
Decrease in Disposable Household Income -60
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Oregon would see disposable household
Figure 3: Household
Figure 3. Impact Relative toIncome
Loss of Disposable Baseline
income reduced by $913 to $2,959 per year by 2020 and
(Annual Dollars Lost per Household)
$3,789 to $6,909 by 2030 (Figure 3). per Household
0
2020 2030
L/W’s Impact on Energy Prices
-1,000
Most energy prices would rise under L/W, particularly coal, -913
-2,000
oil, and natural gas. The price of gasoline in Oregon would
increase between 72% and 151% by 2030, while electricity -3,000
D o lla rs

-2,959
prices would increase by 38% to 49%. Table 1 shows the -4,000 -3,789
increase in electricity, gasoline, and natural gas prices faced -5,000
by a typical Oregon household compared to national -6,000
household increases. Oregon residents would pay between
-7,000
111% and 152% more for their natural gas by 2030. OR Low OR High -6,909
-8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and OR
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 14% 15%
would result in the electric industry shutting down most (Residential) 2030 38% 49%
carbon-based generation and/or using expensive, as yet 2020 19% 71%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 72% 151%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 27% 37%
have to substitute high cost technologies, such as biomass
(Residential) 2030 111% 152%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output to Baseline (Billion 2007$)
are estimated to reduce Oregon’s gross state product (GSP) Figure 4. Loss in Gross State Product
2020 2030
by between $1.7 and $2.4 billion per year by 2020 and $6.4 $0.00
and $7.6 billion by 2030 (Figure 4). -$1.00

B illio ns o f D o lla rs
-$2.00
Impact on Industry -$1.75
-$3.00 -$2.42
Oregon’s major economic sectors will be affected by -$4.00
emission caps (Figure 5).4 The current two largest sectors, -$5.00
computer and electronic product manufacturing and paper -$6.00
products manufacturing, show decreases in output of 1.6%
-$7.00 -$6.45
to 2.0% and 4.7% to 7.1%, respectively in 2020. All
-$8.00 OR-Low OR-High -$7.62
manufacturing sectors will suffer output losses of between
-$9.00
2.5% and 4.1% by 2020, while output from energy
intensive sectors fall between 9.1% and 12.8%. Electricity
production would fall by between 2.1% and 3.5% (Figure Figure 5: Impact on Industrial Value of Shipments
6). These losses would be significantly higher by 2030 and Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020
would have a lasting impact on Oregon’s economic base.
0%
5
Impact on Low Income Families -2.0%
-1.6%
-2.5%
The impacts of L/W will be felt especially by the poor, who -5% -4.1% -4.7%
spend more of their income on energy and other goods than -7.1%
other income brackets. By 2020, higher energy prices mean -10% -9.1%
that low income families in Oregon (with average incomes
-12.8%
of $14,505) will spend between 17% and 19% of their -15%
income on energy under L/W compared to a projected 15% OR Low OR High
without L/W. Others on fixed incomes, such as the elderly -20%
will also suffer disproportionately. MAN EIS COMP PAP

Impact on State Budgets6


Figure 6: Impact on Production
The increases in Oregon’s energy costs under L/W will Figure 6. Percent Change in Production by
Percentage Change from Baseline in 2020
impact expenditures throughout the state. Specifically, Sector in 2020
0%
Oregon’s 1,683 schools and universities and 65 hospitals
will likely experience a 20% to 24% percent increase in -1%
expenditures by 2020 and a 64% to 84% increase by 2030.
-2%
For government entities, costs for services, including public -2.1%
transportation and vehicle fleets, such as school buses, will -3%
also rise under L/W. -3.5%
-4%
OR Low OR High
-5%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; COMP = Computer and Electronic Product Manufacturing; PAP = Paper Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Pennsylvania
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)2. Loss in Employment
Figure
2020 2030
0
Impact on Jobs
.

-20
Under L/W, Pennsylvania would lose 43,871 to 65,994 jobs
-40
in 2020 and 104,393 to 138,963 jobs in 2030 (Figure 2).
Thousands of Jobs

-43.87
The primary cause of job losses would be lower industrial -60
output due to higher energy prices, the high cost of -80
-65.99

complying with required emissions cuts, and greater


-100
competition from overseas manufacturers with lower -104.39
energy costs. -120

-140
-138.96
Decrease in Disposable Household Income PA-Low PA-High
-160
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Pennsylvania would see disposable
household income reduced by $1,018 to $3,299 per year by
2020 and $4,314 to $7,866 by 2030 (Figure 3). Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
(Annual Dollars Lost per Household)
per Household
L/W’s Impact on Energy Prices
2020 2030
Most energy prices would rise under L/W, particularly coal, 0
oil, and natural gas. The price of gasoline in Pennsylvania -1,000
-1,018
would increase between 74% and 143% by 2030, while -2,000
electricity prices would increase by 78% to 113%. Table 1 -3,000
D o lla rs

shows the increase in electricity, gasoline, and natural gas -4,000 -3,299
prices faced by a typical Pennsylvania household compared -5,000 -4,314
to national household increases. Pennsylvania residents -6,000
would pay between 93% and 133% more for their natural -7,000
gas by 2030. -8,000
PA Low PA High -7,866
-9,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
PA
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 22% 26%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 78% 113%
unproven technology, to capture and store CO2. To meet 2020 20% 66%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 74% 143%
have to substitute high cost technologies, such as biomass Natural Gas 2020 23% 32%
and wind, for conventional generation. (Residential) 2030 93% 133%

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative


High energy prices, fewer jobs, and loss of industrial output to Baseline
Figure 4.(Billion
Loss in 2007$)
Gross State Product
are estimated to reduce Pennsylvania’s gross state product 2020 2030
(GSP) by between $6.1 and $8.4 billion per year by 2020 $0.00
and $22.5 and $26.6 billion by 2030 (Figure 4). -$5.00

Billio ns o f D o lla rs
-$6.10
Impact on Industry -$10.00 -$8.45
Pennsylvania’s major economic sectors will be affected by -$15.00
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and food products manufacturing, -$20.00
show decreases in output of 5.4% to 6.0% and 1.4% to -$25.00 -$22.50
2.4%, respectively in 2020. All manufacturing sectors will PA-Low PA-High -$26.56
suffer output losses of between 2.3% and 4.1% by 2020, -$30.00
while output from energy intensive sectors fall between
8.2% and 10.5%. In addition, the general shift away from
coal would result in a 30.9% to 30.2% reduction in coal Figure 5: Impact on Industrial Value of Shipments
production and electricity production would fall by 0.4% to Percentage Change
Figure 5. Percent frominBaseline
Change Output byin 2020in 2020
Industry

1.6% (Figure 6). These losses would be significantly higher 0%


by 2030 and would have a lasting impact on Pennsylvania’s -1.4%
economic base. -2.3% -2.4%
-5% -4.1%
-5.4%
-6.0%
Impact on Low Income Families5 -10% -8.2%
The impacts of L/W will be felt especially by the poor, who -10.5%
spend more of their income on energy and other goods than -15%
other income brackets. By 2020, higher energy prices mean
that low income families in Pennsylvania (with average PA Low PA High
-20%
incomes of $14,193) will spend between 20% and 21% of
MAN EIS CHEM FOOD
their income on energy under L/W compared to a projected
17% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately.
Figure 6: Impact on Production
Impact on State Budgets6 Figure 6. Percent Change in Production by
Percentage Change from Baseline in 2020
Sector in 2020 -0.4%
The increases in Pennsylvania’s energy costs under L/W 0%
will impact expenditures throughout the state. Specifically, -5% -1.6%

Pennsylvania’s 5,522 schools and universities and 282 -10%


hospitals will likely experience a 28% to 38% percent -15%
increase in expenditures by 2020 and an 88% to 127% -20%
increase by 2030. For government entities, costs for -25%
services, including public transportation and vehicle fleets, -30%
such as school buses, will also rise under L/W. -30.9% -30.2%
-35% PA Low PA High
-40%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; FOOD = Food Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Rhode Island
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands Figure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs -2
.

Under L/W, Rhode Island would lose 4,241 to 6,380 jobs in -4


2020 and 10,373 to 13,808 jobs in 2030 (Figure 2). The
Thousands of Jobs

-4.24
-6
primary cause of job losses would be lower industrial
-6.38
output due to higher energy prices, the high cost of -8
complying with required emissions cuts, and greater -10
competition from overseas manufacturers with lower -10.37
-12
energy costs.
-14
-13.81
RI-Low RI-High
Decrease in Disposable Household Income -16
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3:Figure
Household
3. Loss Impact Relative
of Disposable to Baseline
Income
on households. Rhode Island would see disposable (Annual Dollars Lost per Household)
household income reduced by $1,124 to $3,645 per year by per Household
2020 and $4,900 to $8,934 by 2030 (Figure 3). 0
2020 2030
-1,000
L/W’s Impact on Energy Prices -2,000 -1,124
-3,000
Most energy prices would rise under L/W, particularly coal, -4,000
oil, and natural gas. The price of gasoline in Rhode Island -3,645
D o lla rs

-5,000
-4,900
would increase between 74% and 144% by 2030, while -6,000
electricity prices would increase by 54% to 81%. Table 1 -7,000
shows the increase in electricity, gasoline, and natural gas -8,000
prices faced by a typical Rhode Island household compared -9,000
-10,000 -8,934
to national household increases. Rhode Island residents RI Low RI High
-11,000
would pay between 86% and 121% more for their natural
gas by 2030.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
economy (transportation, residential, commercial, and
industry); however, as the largest emitter of GHGs, the Table 1: Change in Energy Prices at Household Level
primary impact would fall on the electric sector. L/W (% change from baseline)
would result in the electric industry shutting down most RI
carbon-based generation and/or using expensive, as yet Sector Year Low High
unproven technology, to capture and store CO2. To meet Electricity 2020 18% 22%
the stringent goals of L/W, the electric industry would also (Residential) 2030 54% 81%
have to substitute high cost technologies, such as biomass 2020 20% 67%
and wind, for conventional generation. Gasoline (Retail)
2030 74% 144%
Natural Gas 2020 20% 28%
Impact on Economic Growth
(Residential) 2030 86% 121%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Rhode Island’s gross state product
(GSP) by between $545 and $755 million per year by 2020
and $2 and $2.4 billion by 2030 (Figure 4). Figure 4: Annual Impact of GSP Relative
to Baseline
Figure 4.(Billion
Loss in2007$)
Gross State Product
Impact on Industry 2020 2030
$0.00
Rhode Island’s major economic sectors will be affected by
emission caps (Figure 5).4 The current two largest sectors, -$0.50

Billio ns o f D o lla rs
chemical manufacturing and miscellaneous manufacturing, -$0.55
-$1.00 -$0.76
show decreases in output of 6.1% to 6.8% and 0.0% to
1.3%, respectively in 2020. All manufacturing sectors will -$1.50
suffer output losses of between 2.9% and 4.0% by 2020,
-$2.00
while output from energy intensive sectors fall between -$2.01
8.0% and 9.9%. Electricity production would fall by -$2.50 -$2.37
between 9.2% and 12.0% (Figure 6). These losses would be RI-Low RI-High
-$3.00
significantly higher by 2030 and would have a lasting
impact on Rhode Island’s economic base.
Figure 5: Impact on Industrial Value of Shipments
Impact on Low Income Families5 Percentage Change
Figure 5. Percent from
Change Baseline
in Output in 2020
by Industry in 2020
The impacts of L/W will be felt especially by the poor, who
spend more of their income on energy and other goods than 0%
other income brackets. By 2020, higher energy prices mean -3%
-1.3%
that low income families in Rhode Island (with average -2.9%
-4.0%
incomes of $13,101) will spend between 26% and 29% of -6%
their income on energy under L/W compared to a projected -6.1% -6.8%
22% without L/W. Others on fixed incomes, such as the -9% -8.0%
elderly will also suffer disproportionately. -9.9%
-12%
RI Low RI High
Impact on State Budgets6 -15%
The increases in Rhode Island’s energy costs under L/W MAN EIS CHEM MISC
will impact expenditures throughout the state. Specifically,
Rhode Island’s 491 schools and universities and 17 Figure 6: Impact on Production
hospitals will likely experience a 28% to 38% percent Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
increase in expenditures by 2020 and an 88% to 127% Sector in 2020
0.0%
increase by 2030. For government entities, costs for -2.0%
services, including public transportation and vehicle fleets,
-4.0%
such as school buses, will also rise under L/W.
-6.0%
-8.0%
-10.0% -9.2%
-12.0% -12.0%
RI Low RI High
-14.0%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; MISC = Miscellaneous Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
South Carolina
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands Figure
of Jobs)2. Loss in Employment
2020 2030
0
Impact on Jobs
-10
.

Under L/W, South Carolina would lose 18,363 to 27,623


-20
jobs in 2020 and 51,817 to 68,976 jobs in 2030 (Figure 2). -18.36
Thousands of Jobs

The primary cause of job losses would be lower industrial -30 -27.62
output due to higher energy prices, the high cost of -40
complying with required emissions cuts, and greater
-50
competition from overseas manufacturers with lower -51.82
energy costs. -60

-70
-68.98
Decrease in Disposable Household Income SC-Low SC-High
-80
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost FigureFigure
3: Household
3. Loss ofImpact Relative
Disposable Incometo Baseline
on households. South Carolina would see disposable (Annual Dollars Lost per Household)
household income reduced by $778 to $2,522 per year by per Household
2020 and $3,279 to $5,978 by 2030 (Figure 3). 0 2020 2030

-1,000 -778
L/W’s Impact on Energy Prices
-2,000
Most energy prices would rise under L/W, particularly coal,
D o lla r s

oil, and natural gas. The price of gasoline in South Carolina -3,000 -2,522
would increase between 74% and 145% by 2030, while -4,000
-3,279
electricity prices would increase by 103% to 135%. Table 1
shows the increase in electricity, gasoline, and natural gas -5,000
prices faced by a typical South Carolina household -6,000
compared to national household increases. South Carolina SC Low SC High -5,978
-7,000
residents would pay between 91% and 131% more for their
natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W SC
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 30% 39%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 103% 135%
the stringent goals of L/W, the electric industry would also
2020 21% 70%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 74% 145%
Natural Gas 2020 23% 32%
Impact on Economic Growth (Residential) 2030 91% 131%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce South Carolina’s gross state product
(GSP) by between $1.8 and $2.4 billion per year by 2020
and $6.5 and $7.7 billion by 2030 (Figure 4). Figure 4: Annual Impact of GSP Relative
to Baseline
Figure(Billion
4. Loss 2007$)
in Gross State Product
Impact on Industry 2020 2030
$0.00
South Carolina’s major economic sectors will be affected -$1.00
by emission caps (Figure 5).4 The current two largest

Billio ns o f D o lla rs
-$2.00
sectors, machinery manufacturing and plastic and rubber -$1.76
-$3.00 -$2.44
products manufacturing, show decreases in output of 5.2%
-$4.00
to 5.3% and 6.2% to 6.6%, respectively in 2020. All
-$5.00
manufacturing sectors will suffer output losses of between
-$6.00
3.2% and 4.4% by 2020, while output from energy
-$7.00 -$6.49
intensive sectors fall between 7.8% and 9.1%. A general
-$8.00 -$7.67
shift in nationwide generation patterns would result in SC-Low SC-High
-$9.00
South Carolina’s electricity production increasing by
between 1.5% and 0.9% by 2020 (Figure 6).
Figure 5: Impact on Industrial Value of Shipments
Impact on Low Income Families 5 Percentage
Figure 5.Change from Baseline
Percent Change in Industry
in Output by 2020 in 2020
The impacts of L/W will be felt especially by the poor, who 0%
spend more of their income on energy and other goods than
other income brackets. By 2020, higher energy prices mean -5% -3.2%
-4.4% -5.2% -5.3%
that low income families in South Carolina (with average -6.2%
-6.6%
incomes of $12,477) will spend between 21% and 23% of -7.8%
-10% -9.1%
their income on energy under L/W compared to a projected
18% without L/W. Others on fixed incomes, such as the -15%
elderly will also suffer disproportionately.
SC Low SC High
6 -20%
Impact on State Budgets
MAN EIS MACH PLA
The increases in South Carolina’s energy costs under L/W
will impact expenditures throughout the state. Specifically,
South Carolina’s 1,585 schools and universities and 94
hospitals will likely experience a 28% to 35% percent Figure 6: Impact on Production
increase in expenditures by 2020 and a 91% to 123% Percentage
Figure 6.Change
Percentfrom Baseline
Change in 2020 by
in Production
Sector in 2020
increase by 2030. For government entities, costs for 2.0%
services, including public transportation and vehicle fleets,
1.5%
such as school buses, will also rise under L/W. 1.5%

1.0% 0.9%

0.5%
SC Low SC High
0.0%
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MACH = Machinery Manufacturing; PLA = PlasticCoal Electricity
and Rubber Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
South Dakota
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

Under L/W, South Dakota would lose 3,297 to 4,960 jobs -2

in 2020 and 8,237 to 10,964 jobs in 2030 (Figure 2). The


Thousands of Jobs

-4 -3.30
primary cause of job losses would be lower industrial
output due to higher energy prices, the high cost of -6
-4.96

complying with required emissions cuts, and greater


competition from overseas manufacturers with lower -8
-8.24
energy costs.
-10

Decrease in Disposable Household Income SD-Low SD-High -10.96


-12
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. South Dakota would see disposable Figure 3: Household Impact
Figure 3. Loss RelativeIncome
of Disposable to Baseline
household income reduced by $921 to $2,986 per year by (Annual Dollars Lost per Household)
per Household
2020 and $3,887 to $7,087 by 2030 (Figure 3). 2020 2030
0
-1,000
L/W’s Impact on Energy Prices -921
-2,000
Most energy prices would rise under L/W, particularly coal,
-3,000
oil, and natural gas. The price of gasoline in South Dakota -2,986
D o lla r s

-4,000
would increase between 73% and 140% by 2030, while -3,887
-5,000
electricity prices would increase by 124% to 153%. Table 1
shows the increase in electricity, gasoline, and natural gas -6,000
prices faced by a typical South Dakota household compared -7,000
-7,087
to national household increases. South Dakota residents -8,000
SD Low SD High
would pay between 109% and 153% more for their natural -9,000
gas by 2030.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W SD
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 31% 39%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 124% 153%
the stringent goals of L/W, the electric industry would also
2020 21% 67%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 73% 140%
Natural Gas 2020 28% 38%
Impact on Economic Growth (Residential) 2030 109% 153%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce South Dakota’s gross state product
(GSP) by between $384 and $532 million per year by 2020
and $1.4 and $1.7 billion by 2030 (Figure 4). Figure 4: Annual Impact of GSP Relative
to Baseline
Figure (Billion 2007$)
4. Loss in Gross State Product
Impact on Industry 2020 2030
$0.00
South Dakota’s major economic sectors will be affected by -$0.20
emission caps (Figure 5).4 The current two largest sectors,

Billio ns o f D o lla rs
-$0.40
miscellaneous manufacturing and non-metal mineral -$0.60 -$0.38
-$0.53
products manufacturing, show decreases in output of 0.0% -$0.80
to 1.2% and 10.0% to 11.5%, respectively in 2020. All -$1.00
manufacturing sectors will suffer output losses of between -$1.20
3.5% and 5.2% by 2020, while output from energy -$1.40
-$1.60 -$1.41
intensive sectors fall between 4.5% and 5.7%. Electricity
production would fall by between 9.6% and 10.0% (Figure -$1.80 -$1.67
SD-Low SD-High
-$2.00
6). These losses would be significantly higher by 2030 and
would have a lasting impact on South Dakota’s economic
base. Figure 5: Impact on Industrial Value of Shipments
Percentage Change
Figure 5. Percent from
ChangeBaseline
in Output in 2020 in 2020
by Industry
Impact on Low Income Families5 0%
The impacts of L/W will be felt especially by the poor, who -1.2%
spend more of their income on energy and other goods than -5% -3.5%
-4.5%
-5.2%
other income brackets. By 2020, higher energy prices mean -5.7%
that low income families in South Dakota (with average -10%
-10.0%
incomes of $14,037) will spend between 20% and 23% of -11.5%
their income on energy under L/W compared to a projected -15%
17% without L/W. Others on fixed incomes, such as the
SD Low SD High
elderly will also suffer disproportionately. -20%
MAN EIS MISC MIN
Impact on State Budgets6
The increases in South Dakota’s energy costs under L/W
will impact expenditures throughout the state. Specifically, Figure 6: Impact
Figure on Production
6. Percent Change in Production by
South Dakota’s 844 schools and universities and 74 Percentage Change frominBaseline
Sector 2020 in 2020
hospitals will likely experience a 31% to 39% percent 0%
increase in expenditures by 2020 and a 107% to 146% -3%
increase by 2030. For government entities, costs for
services, including public transportation and vehicle fleets, -6%
such as school buses, will also rise under L/W. -9%
-9.6% -10.0%
-12%
SD Low SD High
-15%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MISC = Miscellaneous Manufacturing; MIN = Non-Metal Mineral Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Tennessee
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
(ThousandsFigure 2. Loss in Employment
of Jobs)
increase to between $227/MT and $271/MT by 2030.3
2020 2030
0
Impact on Jobs -10
.

Under L/W, Tennessee would lose 23,239 to 34,958 jobs in -20


2020 and 60,421 to 80,429 jobs in 2030 (Figure 2). The -23.24
Thousands of Jobs

-30
primary cause of job losses would be lower industrial -40 -34.96
output due to higher energy prices, the high cost of
-50
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -60
-60.42
energy costs. -70

-80
TN-Low TN-High -80.43
Decrease in Disposable Household Income -90
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost
on households. Tennessee would see disposable household Figure 3: Household Impact Relative to Baseline
income reduced by $906 to $2,937 per year by 2020 and Figure
(Annual 3. Loss
Dollars of per
Lost Disposable Income
Household)
$3,859 to $7,037 by 2030 (Figure 3). per Household
0
2020 2030
L/W’s Impact on Energy Prices
-1,000
-906
Most energy prices would rise under L/W, particularly coal,
-2,000
oil, and natural gas. The price of gasoline in Tennessee
-3,000
would increase between 74% and 144% by 2030, while
D o lla r s

-2,937
electricity prices would increase by 122% to 159%. Table 1 -4,000 -3,859
shows the increase in electricity, gasoline, natural gas -5,000
prices faced by a typical Tennessee household compared to -6,000
national household increases. Tennessee residents would
-7,000
pay between 99% and 142% more for their natural gas by TN Low TN High -7,037
-8,000
2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and TN
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 32% 40%
would result in the electric industry shutting down most (Residential) 2030 122% 159%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 25% 35%
have to substitute high cost technologies, such as biomass
(Residential) 2030 99% 142%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Tennessee’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $2.8 and $3.9 billion per year by 2020 to Figure 4. (Billion
Baseline Loss in Gross
2007$)State Product
2020 2030
and $10.3 and $12.2 billion by 2030 (Figure 4). $0.00

-$2.00
Impact on Industry

B illio ns o f D o lla rs
-$4.00 -$2.81
Tennessee’s major economic sectors will be affected by -$3.89
emission caps (Figure 5).4 The current two largest sectors, -$6.00
chemical manufacturing and food products manufacturing, -$8.00
show decreases in output of 8.1% to 9.6% and 1.6% to
2.4%, respectively in 2020. All manufacturing sectors will -$10.00
suffer output losses of between 3.5% and 5.9% by 2020, -$10.35
-$12.00
while output from energy intensive sectors fall between TN-Low TN-High -$12.22
-$14.00
7.5% and 9.5%. Tennessee’s coal production would fall
between 18.5% and 22.1%, although due to its low cost of
generation, electricity supply could rise slightly over the
baseline forecast (Figure 6). Continued losses in production Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in
will have a lasting effect on the economic base of Percentage Change2020 from Baseline in 2020
Tennessee. 0%

-3% -1.6%
Impact on Low Income Families5 -2.4%
-3.5%
The impacts of L/W will be felt especially by the poor, who -6%
-5.9%
spend more of their income on energy and other goods than
-9% -7.5%
other income brackets. By 2020, higher energy prices mean -8.1%
-9.5% -9.6%
that low income families in Tennessee (with average -12%
incomes of $13,569) will spend between 20% and 22% of TN Low TN High
their income on energy under L/W compared to a projected -15%
17% without L/W. Others on fixed incomes, such as the MAN EIS CHEM FOOD
elderly will also suffer disproportionately.

Impact on State Budgets6


The increases in Tennessee’s energy costs under L/W will Figure 6: 6.
Figure Impact onChange
Percent Production
in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
Tennessee’s 2,360 schools and universities and 176 5% 1.5% 0.9%
hospitals will likely experience a 28% to 35% percent 0%
increase in expenditures by 2020 and a 91% to 123% -5%
increase by 2030. For government entities, costs for -10%
services, including public transportation and vehicle fleets, -15%
such as school buses, will also rise under L/W. -20% -18.5%
-25% -22.1%
TN Low TN High
-30%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; FOOD = Food Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
Texas
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs -50
.

Under L/W, Texas would lose 92,868 to 139,699 jobs in -100


-92.87
2020 and 251,394 to 334,642 jobs in 2030 (Figure 2). The
Thousands of Jobs

-150
primary cause of job losses would be lower industrial -139.70

output due to higher energy prices, the high cost of -200


complying with required emissions cuts, and greater -250
competition from overseas manufacturers with lower -251.39
-300
energy costs.
-350 -334.64
TX-Low TX-High
Decrease in Disposable Household Income -400
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3:Figure
Household
3. LossImpact Relative
of Disposable to Baseline
Income
on households. Texas would see disposable household (Annual Dollars Lost per Household)
income reduced by $1,044 to $3,384 per year by 2020 and per Household
$4,395 to $8,015 by 2030 (Figure 3). 0
2020 2030
-1,000
L/W’s Impact on Energy Prices -2,000 -1,044

Most energy prices would rise under L/W, particularly coal, -3,000
oil, and natural gas. The price of gasoline in Texas would -4,000 -3,384
D o lla rs

increase between 76% and 147% by 2030, while electricity -5,000 -4,395
prices would increase by 101% to 145%. Table 1 shows the -6,000
-7,000
increase in electricity, gasoline, and natural gas prices faced
-8,000
by a typical Texas household compared to national -8,015
-9,000
household increases. Texas residents would pay between TX Low TX High
-10,000
101% and 145% more for their natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and
TX
industry); however, as the largest emitter of GHGs, the
Sector Year Low High
primary impact would fall on the electric sector. L/W
Electricity 2020 32% 35%
would result in the electric industry shutting down most
carbon-based generation and/or using expensive, as yet (Residential) 2030 101% 145%
unproven technology, to capture and store CO2. To meet 2020 21% 71%
Gasoline (Retail)
the stringent goals of L/W, the electric industry would also 2030 76% 147%
have to substitute high cost technologies, such as biomass Natural Gas 2020 25% 36%
and wind, for conventional generation. (Residential) 2030 101% 145%

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Texas’ gross state product (GSP) by Figure 4.(Billion
to Baseline Loss in 2007$)
Gross State Product
between $12 and $16.6 billion per year by 2020 and $44.2 2020 2030
$0.00
and $52.2 billion by 2030 (Figure 4).
-$10.00

B illio ns o f D o lla rs
Impact on Industry -$12.00
-$20.00 -$16.62
Texas’ major economic sectors will be affected by emission
caps (Figure 5).4 The current two largest sectors, chemical -$30.00
manufacturing and computer and electronic product
-$40.00
manufacturing, show decreases in output of 1.9% to 2.0%
and 1.5% to 1.9%, respectively in 2020. All manufacturing -$50.00 -$44.24
sectors will suffer output losses of between 2.6% and 4.2% TX-Low TX-High -$52.24
by 2020, while output from energy intensive sectors fall -$60.00
between 2.2% and 4.3%. In addition, the general shift away
from coal would result in a 36.1% to 37.5% reduction in
coal production and electricity production would fall by 9.6
to 10.2% (Figure 6). These losses would be significantly
higher by 2030 and would have a lasting impact on Texas’ Figure 5: 5.Impact
Figure Percenton Industrial
Change Value
in Output of Shipments
by Industry in
economic base. Percentage Change from Baseline in 2020
2020
0%
5
Impact on Low Income Families -2% -1.5%
-1.9% -1.9%
The impacts of L/W will be felt especially by the poor, who -2.2% -2.0%
-2.6%
spend more of their income on energy and other goods than -4%
-4.2% -4.3%
other income brackets. By 2020, higher energy prices mean
-6%
that low income families in Texas (with average incomes of
$14,505) will spend between 19% and 20% of their income -8%
on energy under L/W compared to a projected 16% without TX Low TX High
L/W. Others on fixed incomes, such as the elderly will also -10%
suffer disproportionately. MAN EIS CHEM COMP

Impact on State Budgets6


The increases in Texas’s energy costs under L/W will Figure
Figure 6: Impact on
6. Percent Production
Change in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
Texas’s 10,337 schools and universities and 622 hospitals 0%
will likely experience a 28% to 35% percent increase in
-10% -9.6%
expenditures by 2020 and a 91% to 123% increase by 2030. -10.2%
For government entities, costs for services, including public -20%
transportation and vehicle fleets, such as school buses, will -30%
also rise under L/W.
-40% -37.5% -36.1%
TX Low TX High
-50%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; COMP = Computer and Electronic Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Utah
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-5
Under L/W, Utah would lose 10,227 to 15,384 jobs in 2020 -10
and 28,155 to 37,479 jobs in 2030 (Figure 2). The primary
Thousands of Jobs

-10.23
-15
cause of job losses would be lower industrial output due to -15.38
-20
higher energy prices, the high cost of complying with
required emissions cuts, and greater competition from -25

overseas manufacturers with lower energy costs. -30 -28.16

-35
Decrease in Disposable Household Income -40 -37.48
UT-Low UT-High
Higher energy prices would have ripple impacts on prices -45
throughout the economy and would impose a financial cost
on households. Utah would see disposable household
income reduced by $919 to $2,979 per year by 2020 and
Figure 3: Household
Figure 3.Impact
Loss of Relative to Income
Disposable Baseline
$3,780 to $6,893 by 2030 (Figure 3).
(Annual Dollars Lost per Household)
per Household
L/W’s Impact on Energy Prices 2020 2030
0
Most energy prices would rise under L/W, particularly coal, -1,000
oil, and natural gas. The price of gasoline in Utah would -2,000
-919
increase between 74% and 140% by 2030, while electricity
-3,000
prices would increase by 96% to 133%. Table 1 shows the -2,979
D o lla rs

-4,000 -3,780
increase in electricity, gasoline, and natural gas prices faced
-5,000
by a typical Utah household compared to national
-6,000
household increases. Utah residents would pay between
113% and 154% more for their natural gas by 2030. -7,000
-6,893
-8,000
UT Low UT High
-9,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and UT
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 23% 30%
would result in the electric industry shutting down most (Residential) 2030 96% 133%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 39%
have to substitute high cost technologies, such as biomass
(Residential) 2030 113% 154%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Utah’s gross state product (GSP) by to Baseline
Figure 4.(Billion
Loss in2007$)
Gross State Product
between $1.1 and $1.5 billion per year by 2020 and $4 and 2020 2030
$0.00
$4.7 billion by 2030 (Figure 4).
-$1.00

Billio ns o f D o lla rs
Impact on Industry -$1.09
-$2.00 -$1.51
Utah’s major economic sectors will be affected by emission
caps (Figure 5).4 The current two largest sectors, -$3.00
miscellaneous manufacturing and primary metals
-$4.00
manufacturing, show decreases in output of 0.0% to 1.2% -$4.02
and 23.5% to 31.3%, respectively in 2020. All -$5.00 -$4.74
manufacturing sectors will suffer output losses of between UT-Low UT-High
-$6.00
2.2% and 3.5% by 2020, while output from energy
intensive sectors fall between 10.0% and 13.3%. In
addition, the general shift away from coal would result in a Figure
Figure5:
5. Impact
Percent on Industrial
Change Value
in Output of Shipments
by Industry in
38.9% to 43.0% reduction in coal production and electricity Percentage Change from 2020Baseline in 2020
production would fall by 2.1% to 3.5% (Figure 6). These
0%
losses would be significantly higher by 2030 and would -2.2% -1.2%
have a lasting impact on Utah’s economic base. -3.5%
-10%
-10.0%
5
Impact on Low Income Families -13.3%
The impacts of L/W will be felt especially by the poor, who -20%
spend more of their income on energy and other goods than -23.5%
other income brackets. By 2020, higher energy prices mean -30%
that low income families in Utah (with average incomes of -31.3%
UT Low UT High
$14,973) will spend between 17% and 19% of their income -40%
on energy under L/W compared to a projected 14% without MAN EIS MISC MET
L/W. Others on fixed incomes, such as the elderly will also
suffer disproportionately.

Impact on State Budgets6 Figure 6: Impact


Figure on Production
6. Percent Change in Production by
Percentage Change frominBaseline
Sector 2020 in 2020
The increases in Utah’s energy costs under L/W will
impact expenditures throughout the state. Specifically,
0%
Utah’s 1125 schools and universities and 56 hospitals will -2.1% -3.5%
likely experience a 20% to 24% percent increase in -10%
expenditures by 2020 and a 64% to 84% increase by 2030. -20%
For government entities, costs for services, including public
-30%
transportation and vehicle fleets, such as school buses, will
also rise under L/W. -40%
-38.9% UT Low UT High
-43.0%
-50%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MISC = Miscellaneous Manufacturing; MET = Primary Metals Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Vermont
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure
of Jobs)
2. Loss in Employment
2020 2030
0
Impact on Jobs -1
.

Under L/W, Vermont would lose 2,679 to 4,030 jobs in -2


Thousands of Jobs

2020 and 6,552 to 8,722 jobs in 2030 (Figure 2). The -3 -2.68
primary cause of job losses would be lower industrial -4
-4.03
output due to higher energy prices, the high cost of -5
complying with required emissions cuts, and greater -6
competition from overseas manufacturers with lower -7 -6.55
energy costs. -8
-9 -8.72
Decrease in Disposable Household Income VT-Low VT-High
-10
Higher energy prices would have ripple impacts on prices
throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Vermont would see disposable household FigureLost
(Annual Dollars 3. Loss
perofHousehold)
Disposable Income
income reduced by $901 to $2,920 per year by 2020 and per Household
$3,925 to $7,157 by 2030 (Figure 3). 0
2020 2030
-1,000
L/W’s Impact on Energy Prices -901
-2,000
Most energy prices would rise under L/W, particularly coal, -3,000
oil, and natural gas. The price of gasoline in Vermont -2,920
D o lla r s

-4,000
would increase between 74% and 144% by 2030, while -3,925
-5,000
electricity prices would increase by 54% to 81%. Table 1
-6,000
shows the increase in electricity, gasoline, and natural gas
prices faced by a typical Vermont household compared to -7,000
-8,000 -7,157
national household increases. Vermont residents would pay VT Low VT High
between 86% and 121% more for their natural gas by 2030. -9,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and VT
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 18% 22%
would result in the electric industry shutting down most (Residential) 2030 54% 81%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 144%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 20% 28%
have to substitute high cost technologies, such as biomass
(Residential) 2030 86% 121%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Vermont’s gross state product Figure 4: Annual Impact of GSP Relative
Figure (Billion
to Baseline 4. Loss in Gross State Product
2007$)
(GSP) by between $287 and $398 million per year by 2020
2020 2030
and $1.1 and $1.2 billion by 2030 (Figure 4). $0.00

-$0.20
Impact on Industry

B illio ns o f D o lla rs
-$0.40 -$0.29
Vermont’s major economic sectors will be affected by -$0.40
emission caps (Figure 5).4 The current two largest sectors, -$0.60
computer and electronic product manufacturing and non- -$0.80
metal mineral products manufacturing, show decreases in
output of 1.6% to 2.0% and 11.2% to 13.0%, respectively -$1.00
in 2020. All manufacturing sectors will suffer output losses -$1.20 -$1.06
of between 2.9% and 4.0% by 2020, while output from VT-Low VT-High -$1.25
-$1.40
energy intensive sectors fall between 8.0% and 9.9%.
Electricity production would fall by between 9.2% and
12.0% (Figure 6). These losses would be significantly
higher by 2030 and would have a lasting impact on Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
Vermont’s economic base. Percentage Change from Baseline in 2020
0%
5 -1.6%
Impact on Low Income Families -2.9% -2.0%
-5% -4.0%
The impacts of L/W will be felt especially by the poor, who
spend more of their income on energy and other goods than -8.0%
other income brackets. By 2020, higher energy prices mean -10%
-9.9%
that low income families in Vermont (with average -11.2%
-15% -13.0%
incomes of $14,349) will spend between 23% and 27% of
their income on energy under L/W compared to a projected VT Low VT High
20% without L/W. Others on fixed incomes, such as the -20%
elderly will also suffer disproportionately. MAN EIS COMP MIN

Impact on State Budgets6


Figure
Figure6:6.Impact onChange
Percent Production
in Production by
The increases in Vermont’s energy costs under L/W will Percentage Change from Baseline in 2020
Sector in 2020
impact expenditures throughout the state. Specifically,
Vermont’s 2,242 schools and universities and 17 hospitals 0%
will likely experience a 28% to 38% percent increase in
expenditures by 2020 and an 88% to 127% increase by -5%
2030. For government entities, costs for services, including
public transportation and vehicle fleets, such as school -10% -9.2%
buses, will also rise under L/W.
-12.0%
VT Low VT High
-15%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; COMP = Computer and Electronic Products Manufacturing; MIN = Non-Metal Mineral Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient data to
accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to accurately
calculate these quantities on the state level.
Virginia
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands of Jobs)
Figure 2. Loss in Employment
2020 2030
0
Impact on Jobs
.

-20
Under L/W, Virginia would lose 35,820 to 53,883 jobs in -40 -35.82
Thousands of Jobs

2020 and 101,076 to 134,548 jobs in 2030 (Figure 2). The


-60
primary cause of job losses would be lower industrial -53.88

output due to higher energy prices, the high cost of -80


complying with required emissions cuts, and greater -100
competition from overseas manufacturers with lower -101.08
-120
energy costs.
-140 -134.55

Decrease in Disposable Household Income -160


VA-Low VA-High

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3:Figure
Household
3. LossImpact Relative
of Disposable to Baseline
Income
on households. Virginia would see disposable household (Annual Dollars Lost per Household)
income reduced by $1,073 to $3,479 per year by 2020 and per Household
$4,522 to $8,246 by 2030 (Figure 3). 2020 2030
0
-1,000
L/W’s Impact on Energy Prices -1,073
-2,000
Most energy prices would rise under L/W, particularly coal, -3,000
oil, and natural gas. The price of gasoline in Virginia would -4,000
D o lla r s

-3,479
increase between 74% and 145% by 2030, while electricity -5,000 -4,522
-6,000
prices would increase by 103% to 135%. Table 1 shows the
-7,000
increase in electricity, gasoline, and natural gas prices faced
-8,000
by a typical Virginia household compared to national
-9,000 -8,246
household increases. Virginia residents would pay between VA Low VA High
-10,000
91% and 131% more for their natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and VA
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 30% 39%
would result in the electric industry shutting down most (Residential) 2030 103% 135%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 145%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 23% 32%
have to substitute high cost technologies, such as biomass
(Residential) 2030 91% 131%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Virginia’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $4.3 and $5.9 billion per year by 2020 toFigure
Baseline (Billion
4. Loss 2007$)
in Gross State Product
and $15.8 and $18.7 billion by 2030 (Figure 4). 2020 2030
-$2.00
Impact on Industry

Billio ns o f D o lla rs
-$4.29
Virginia’s major economic sectors will be affected by -$7.00 -$5.94
emission caps (Figure 5).4 The current two largest sectors,
chemical manufacturing and food products manufacturing, -$12.00
show decreases in output of 7.2% to 8.2% and 1.6% to
2.4%, respectively in 2020. All manufacturing sectors will -$17.00 -$15.81
suffer output losses of between 3.2% and 4.4% by 2020,
VA-Low VA-High -$18.67
while output from energy intensive sectors fall between -$22.00
7.8% and 9.1%. Virginia’s coal production would fall
around 35.9% to 36.0%, although due to its low cost of
generation, electricity supply could rise slightly over the
baseline forecast (Figure 6). Continued losses in production Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
will have a lasting effect on the economic base of Virginia. Percentage Change from Baseline in 2020
0%
5
Impact on Low Income Families -3%
-1.6%
-3.2% -2.4%
The impacts of L/W will be felt especially by the poor, who
-4.4%
spend more of their income on energy and other goods than -6%
other income brackets. By 2020, higher energy prices mean -7.8%
-7.2%
-9% -8.2%
that low income families in Virginia (with average incomes -9.1%
of $14,349) will spend between 18% and 20% of their -12%
income on energy under L/W compared to a projected 15% VA Low VA High
without L/W. Others on fixed incomes, such as the elderly -15%
will also suffer disproportionately. MAN EIS CHEM FOOD

Impact on State Budgets6


The increases in Virginia’s energy costs under L/W will Figure 6: 6.
Figure Impact onChange
Percent Production
in Production by
impact expenditures throughout the state. Specifically, Percentage Change from Baseline in 2020
Sector in 2020
Virginia’s 1,105 schools and universities and 126 hospitals 5% 1.5% 0.9%
will likely experience a 28% to 35% percent increase in
-5%
expenditures by 2020 and a 91% to 123% increase by 2030.
For government entities, costs for services, including public -15%
transportation and vehicle fleets, such as school buses, will -25%
also rise under L/W.
-35%
-36.0% -35.9% VA Low VA High
-45%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical Manufacturing; FOOD = Food Products Manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Washington
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
(Thousands ofFigure
Jobs) 2. Loss in Employment
increase to between $227/MT and $271/MT by 2030.3
2020 2030
0
Impact on Jobs
.
-10
Under L/W, Washington would lose 23,668 to 35,602 jobs -20
Thousands of Jobs

in 2020 and 61,519 to 81,891 jobs in 2030 (Figure 2). The -30
-23.67

primary cause of job losses would be lower industrial -35.60


-40
output due to higher energy prices, the high cost of
-50
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -60
-61.52
energy costs. -70
-80
Decrease in Disposable Household Income -90
WA-Low WA-High -81.89

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to Baseline
on households. Washington would see disposable Figure 3.
(Annual Dollars Lossper
Lost of Disposable
Household)Income
household income reduced by $1,083 to $3,512 per year by per Household
2020 and $4,497 to $8,200 by 2030 (Figure 3). 0
2020 2030
-1,000
L/W’s Impact on Energy Prices -2,000 -1,083

Most energy prices would rise under L/W, particularly coal, -3,000
2007 D ollars

oil, and natural gas. The price of gasoline in Washington -4,000 -3,512
would increase between 72% and 151% by 2030, while -5,000 -4,497
electricity prices would increase by 38% to 49%. Table 1 -6,000
shows the increase in electricity, gasoline, and natural gas -7,000
prices faced by a typical Washington household compared -8,000
to national household increases. Washington residents -9,000 -8,200
WA Low WA High
would pay between 111% and 152% more for their natural -10,000
gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices
L/W would reduce GHG emissions from all sectors of the
economy (transportation, residential, commercial, and Table 1: Change in Energy Prices at Household Level
industry); however, as the largest emitter of GHGs, the (% change from baseline)
primary impact would fall on the electric sector. L/W WA
would result in the electric industry shutting down most Sector Year Low High
carbon-based generation and/or using expensive, as yet 2020 14% 15%
Electricity
unproven technology, to capture and store CO2. To meet
(Residential) 2030 38% 49%
the stringent goals of L/W, the electric industry would also
2020 19% 71%
have to substitute high cost technologies, such as biomass Gasoline (Retail)
and wind, for conventional generation. 2030 72% 151%
Natural Gas 2020 27% 37%
Impact on Economic Growth (Residential) 2030 111% 152%
High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Washington’s gross state product
Figure 4: Annual Impact of GSP Relative
(GSP) by between $3.4 and $4.7 billion per year by 2020
to Baseline
Figure (Billion 2007$)
4. Loss in Gross State Product
and $12.5 and $14.7 billion by 2030 (Figure 4).
2020 2030
$0.00
Impact on Industry -$2.00
Washington’s major economic sectors will be affected by -$4.00

B illio ns o f D o lla rs
-$3.38
emission caps (Figure 5).4 The current two largest sectors, -$6.00 -$4.69
transportation manufacturing and paper manufacturing, -$8.00
show decreases in output of 5.5% to 13.9% and 4.7% to -$10.00
7.1%, respectively in 2020. All manufacturing sectors will -$12.00
suffer output losses of between 2.5% and 4.1% by 2020, -$14.00 -$12.48
while output from energy intensive sectors fall between -$16.00 -$14.73
9.1% and 12.8%. In addition, the general shift away from -$18.00
WA-Low WA-High
coal would result in a 52.7% to 54.3% reduction in coal -$20.00
production and electricity production would fall by 2.1% to
3.5% (Figure 6). These losses would be significantly higher Figure 5: Impact on Industrial Value of Shipments
by 2030 and would have a lasting impact on Washington’s Percentage Change
Figure 5. Percent frominBaseline
Change Output by in 2020in 2020
Industry
economic base.
0%

Impact on Low Income Families5 -2.5%


-5% -4.1% -4.7%
The impacts of L/W will be felt especially by the poor, who -5.5%
spend more of their income on energy and other goods than -7.1%
-10% -9.1%
other income brackets. By 2020, higher energy prices mean
that low income families in Washington (with average -12.8%
-15% -13.9%
incomes of $14,973) will spend between 16% and 18% of
their income on energy under L/W compared to a projected WA Low WA High
14% without L/W. Others on fixed incomes, such as the -20%
elderly will also suffer disproportionately. MAN EIS TRAN PAP

Impact on State Budgets6 Figure 6: Impact on Production


The increases in Washington’s energy costs under L/W will Percentage ChangeChange
Figure 6. Percent from Baseline in 2020
in Production by
impact expenditures throughout the state. Specifically, Sector in 2020
0%
Washington’s 2,910 schools and universities and 112 -2.1% -3.5%
hospitals will likely experience a 20% to 24% percent -10%
increase in expenditures by 2020 and a 64% to 84% -20%
increase by 2030. For government entities, costs for -30%
services, including public transportation and vehicle fleets, -40%
such as school buses, will also rise under L/W. -50%
-60% -54.3% -52.7%
WA Low WA High
-70%
Coal Electricity
4
MAN = Manufacturing, EIS = Energy Intensive Sectors; TRAN = Transportation equipment manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
West Virginia
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 2: Loss in Employment Relative to Baseline
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55 Figure 2: Loss in Employment Relative to Baseline
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
(Thousands
(ThousandsFigureof Jobs)
2. Loss in Employment
of Jobs)
increase to between $227/MT and $271/MT by 2030.3
2020 2030
0
Impact on Jobs
.

-5
Under L/W, West Virginia would lose 7,235 to 10,883 jobs
Thousands of Jobs

in 2020 and 20,415 to 27,175 jobs in 2030 (Figure 2). The -10
-7.23

primary cause of job losses would be lower industrial -10.88

output due to higher energy prices, the high cost of -15


complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -20
-20.41
energy costs.
-25

Decrease in Disposable Household Income -30


WV-Low WV-High -27.18

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost Figure 3: Household Impact Relative to
on households. West Virginia would see disposable Figure
Baseline 3. Loss
(Annual of Disposable
Dollars Income
Lost per Household)
household income reduced by $677 to $2,196 per year by per Household
2020 and $2,855 to $5,206 by 2030 (Figure 3). 2020 2030
0
L/W’s Impact on Energy Prices -1,000 -677
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in West Virginia -2,000
D ollars

would increase between 74% and 145% by 2030, while -2,196


-3,000 -2,855
electricity prices would increase by 103% to 135%. Table 1
shows the increase in electricity, gasoline, and natural gas -4,000
prices faced by a typical West Virginia household
-5,000
compared to national household increases. West Virginia
WV Low WV High -5,206
residents would pay between 91% and 131% more for their -6,000
natural gas by 2030.

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and WV
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 30% 39%
would result in the electric industry shutting down most (Residential) 2030 103% 135%
carbon-based generation and/or using expensive, as yet 2020 21% 70%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 145%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 23% 32%
have to substitute high cost technologies, such as biomass
(Residential) 2030 91% 131%
and wind, for conventional generation.

Impact on Economic Growth Figure 4: Annual Impact of GSP Relative to


High energy prices, fewer jobs, and loss of industrial output Baseline (Billion 2007$)
Figure 4. Loss in Gross State Product
are estimated to reduce West Virginia’s gross state product
2020 2030
(GSP) by between $656 and $910 million per year by 2020 $0.00
and $2.4 and $2.9 billion by 2030 (Figure 4). -$0.50

Billio ns o f D o lla rs
-$1.00 -$0.66
Impact on Industry -$0.91
West Virginia’s major economic sectors will be affected by -$1.50
emission caps (Figure 5).4 The current two largest sectors, -$2.00
chemical manufacturing and wood products manufacturing, -$2.50
show decreases in output of 7.2% to 8.2% and 5.4% to -$2.42
5.6%, respectively in 2020. All manufacturing sectors will -$3.00 -$2.86
WV-Low WV-High
suffer output losses of between 3.2% and 4.4% by 2020, -$3.50
while output from energy intensive sectors fall between
7.8% and 9.1%. In addition, the general shift away from Figure 5: Impact on Industrial Value of Shipments
coal would result in a 35.9% to 36.0% reduction in coal Percentage Change from Baseline in 2020
production and electricity production would fall by around Figure 5. Percent Change in Output by Industry in 2020
17.6% to 18.7% (Figure 6). These losses would be 0%
significantly higher by 2030 and would have a lasting
impact on West Virginia’s economic base. -3.2%
-5% -4.4% -5.4%
-7.2% -5.6%
5 -7.8%
Impact on Low Income Families -10% -8.2%
-9.1%
The impacts of L/W will be felt especially by the poor, who
spend more of their income on energy and other goods than -15%
other income brackets. By 2020, higher energy prices mean
that low income families in West Virginia (with average WV Low WV High
-20%
incomes of $10,762) will spend between 24% and 27% of
MAN EIS CHEM WOOD
their income on energy under L/W compared to a projected
21% without L/W. Others on fixed incomes, such as the
elderly will also suffer disproportionately. Figure 6: Impact on Production Percentage Change
fromFigure
Baseline in 2020 Change in Production by
6. Percent
Impact on State Budgets6 Sector in 2020
0%
The increases in West Virginia’s energy costs under L/W -5%
will impact expenditures throughout the state. Specifically, -10%
West Virginia’s 1,005 schools and universities and 72 -15%
-20% -17.6%
hospitals will likely experience a 28% to 35% percent -18.7%
increase in expenditures by 2020 and a 91% to 123% -25%
-30%
increase by 2030. For government entities, costs for
-35%
services, including public transportation and vehicle fleets, -40% -36.0% -35.9%
WV Low WV High
such as school buses, will also rise under L/W. -45%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; WOOD = Wood products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Wisconsin
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (Thousands ofFigure
Jobs) 2. Loss in Employment
2020 2030
0
Impact on Jobs
.
-10
Under L/W, Wisconsin would lose 22,869 to 34,401 jobs in -20
Thousands of Jobs

2020 and 55,942 to 74,467 jobs in 2030 (Figure 2). The -30
-22.87

primary cause of job losses would be lower industrial -34.40


-40
output due to higher energy prices, the high cost of
-50
complying with required emissions cuts, and greater
competition from overseas manufacturers with lower -60 -55.94

energy costs. -70

-80 -74.47
Decrease in Disposable Household Income -90
WI-Low WI-High

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Wisconsin would see disposable household
income reduced by $913 to $2,961 per year by 2020 and Figure 3. Loss of Disposable Income per
$3,786 to $6,904 by 2030 (Figure 3). Household
0
2020 2030
L/W’s Impact on Energy Prices
-1,000 -913
Most energy prices would rise under L/W, particularly coal,
-2,000
oil, and natural gas. The price of gasoline in Wisconsin
would increase between 72% and 141% by 2030, while -3,000
D ollars

-2,961
electricity prices would increase by 126% to 177%. Table 1 -4,000 -3,786
shows the increase in electricity, gasoline, and natural gas -5,000
prices faced by a typical Wisconsin household compared to
-6,000
national household increases. Wisconsin residents would
pay between 112% and 160% more for their natural gas by -7,000
WI Low WI High -6,904
2030. -8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and WI
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 31% 38%
would result in the electric industry shutting down most (Residential) 2030 126% 177%
carbon-based generation and/or using expensive, as yet 2020 20% 68%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 72% 141%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 29% 40%
have to substitute high cost technologies, such as biomass
(Residential) 2030 112% 160%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output Figure 4: Annual Impact of GSP Relative
are estimated to reduce Wisconsin’s gross state product Figure 4.(Billion
to Baseline Loss in 2007$)
Gross State Product
(GSP) by between $2.7 and $3.8 billion per year by 2020 2020 2030
$0.00
and $10 and $11.8 billion by 2030 (Figure 4).
-$2.00

Billio ns o f D o lla rs
Impact on Industry -$4.00 -$2.72
-$3.77
Wisconsin’s major economic sectors will be affected by -$6.00
emission caps (Figure 5).4 The current two largest sectors,
-$8.00
machinery manufacturing and paper manufacturing, show
decreases in output of 4.8% to 5.3% and 5% to 7%, -$10.00
respectively in 2020. All manufacturing sectors will suffer -$10.03
-$12.00
output losses of between 4% and 7.3% by 2020, while -$11.85
WI-Low WI-High
output from energy intensive sectors fall between 6.8% and -$14.00
8.6%. Electricity production would fall by between 18.1%
and 22.3% (Figure 6). These losses would be significantly Figure 5: Impact on Industrial Value of Shipments
Figure 5. Percent Change in Output by Industry in 2020
higher by 2030 and would have a lasting impact on Percentage Change from Baseline in 2020
0%
Wisconsin’s economic base.
-3%
Impact on Low Income Families5 -4.0%
-6% -4.8% -5.3% -5.0%
The impacts of L/W will be felt especially by the poor, who
-6.8% -7.0%
spend more of their income on energy and other goods than -9% -7.3%
-8.6%
other income brackets. By 2020, higher energy prices mean
that low income families in Wisconsin (with average -12%
incomes of $17,624) will spend between 16% and 17% of WI Low WI High
their income on energy under L/W compared to a projected -15%
13% without L/W. Others on fixed incomes, such as the MAN EIS MACH PAP
elderly will also suffer disproportionately.
Figure 6: Impact on Production
Figure 6. Percent Change in Production by Sector in
Impact on State Budgets6 Percentage Change from Baseline in 2020
2020
The increases in Wisconsin’s energy costs under L/W will 0%
impact expenditures throughout the state. Specifically, -5%
Wisconsin’s 3,365 schools and universities and 152 -10%
hospitals will likely experience a 31% to 39% percent -15%
increase in expenditures by 2020 and a 107% to 146% -20% -18.1%
increase by 2030. For government entities, costs for -22.3%
-25%
services, including public transportation and vehicle fleets,
-30%
such as school buses, will also rise under L/W. WI Low WI High
-35%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; MACH = Machinery manufacturing; PAP = Paper products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.
Wyoming
Economic Impact on the State from the Lieberman-Warner
Proposed Legislation to Reduce Greenhouse Gas Emissions

Understanding the economic impacts of the Lieberman-


Warner Climate Security Act1 (L/W bill) can help guide Figure 1. US CO2 Emissions and S. 2191 Targets
choices on climate change policy.2 In this study, the L/W
bill was analyzed under low and high cost cases with
respect to a baseline that projects the future in the absence
of the bill. The L/W bill would enforce a nationwide cap
and trade program for the emissions of greenhouse gases
(GHGs) and would reduce GHG emissions covered by the
bill to 4,992 Million Metric Tons of CO2 (MMTCO2) by
2020 and 3,856 MMTCO2 by 2030 (Figure 1). L/W sets
targets that would reduce GHG emissions to 15% below
2005 levels by 2020; 30% below 2005 levels by 2030; and
70% below 2005 levels by 2050. Covered emissions are
assumed to include everything from combustion of fossil
fuels in the United States, plus non-CO2 GHG emissions
included in the L/W cap. The price of carbon permits (what
companies must pay to emit CO2) could reach between $55
and $64 per metric ton of CO2 (MT) by 2020 and could Figure 2: Loss in Employment Relative to Baseline
increase to between $227/MT and $271/MT by 2030.3 (ThousandsFigure 2. Loss in Employment
of Jobs)
2020 2030
0
Impact on Jobs -1
.

Under L/W, Wyoming would lose 2,297 to 3,456 jobs in -2


Thousands of Jobs

-2.30
2020 and 6,325 to 8,419 jobs in 2030 (Figure 2). The -3
primary cause of job losses would be lower industrial -4 -3.46

output due to higher energy prices, the high cost of -5


complying with required emissions cuts, and greater -6
competition from overseas manufacturers with lower -7 -6.32

energy costs. -8
-9 -8.42

Decrease in Disposable Household Income -10


WY-Low WY-High

Higher energy prices would have ripple impacts on prices


throughout the economy and would impose a financial cost
on households. Wyoming would see disposable household
income reduced by $894 to $2,898 per year by 2020 and
Figure 3: Household Impact Relative to Baseline
$3,678 to $6,707 by 2030 (Figure 3).
(AnnualFigure 3. Loss
Dollars Lostofper
Disposable Income per
Household)
Household
L/W’s Impact on Energy Prices 2020 2030
0
Most energy prices would rise under L/W, particularly coal,
oil, and natural gas. The price of gasoline in Wyoming -1,000 -894
would increase between 74% and 140% by 2030, while -2,000
electricity prices would increase by 96% to 133%. Table 1 -3,000
D ollars

-2,898
shows the increase in electricity, gasoline, and natural gas
-4,000 -3,678
prices faced by a typical Wyoming household compared to
-5,000
national household increases. Wyoming residents would
pay between 113% and 154% more for their natural gas by -6,000
2030. -7,000 -6,707
WY Low WY High
-8,000

1
S. 2191
2
The study used the National Energy Modeling System (NEMS) and assumptions provided by ACCF and NAM for this analysis. NEMS is used by the US Energy
Information Administration for energy forecasting and policy analysis. “Low” refers to the Low Cost Case, which assumes higher nuclear capacity, less constraints
on new generating technologies, etc. Both cases use higher capital costs than the baseline. “High” refers to the High Cost Case, which assumes low nuclear
additions, constrained new generation technologies, high oil prices, etc. (See the full report for all assumptions).
3
All dollar figures in this report are presented in constant 2007 dollars.
Factors Contributing to Higher Electricity Prices Table 1: Change in Energy Prices at Household Level
L/W would reduce GHG emissions from all sectors of the (% change from baseline)
economy (transportation, residential, commercial, and WY
industry); however, as the largest emitter of GHGs, the Sector Year Low High
primary impact would fall on the electric sector. L/W Electricity 2020 23% 30%
would result in the electric industry shutting down most (Residential) 2030 96% 133%
carbon-based generation and/or using expensive, as yet 2020 20% 67%
unproven technology, to capture and store CO2. To meet Gasoline (Retail)
2030 74% 140%
the stringent goals of L/W, the electric industry would also
Natural Gas 2020 28% 39%
have to substitute high cost technologies, such as biomass
(Residential) 2030 113% 154%
and wind, for conventional generation.

Impact on Economic Growth


High energy prices, fewer jobs, and loss of industrial output
are estimated to reduce Wyoming’s gross state product Figure 4: Annual Impact of GSP Relative
(GSP) by between $320 and $444 million per year by 2020 to Baseline (Billion
Figure 4. Loss in2007$)
Gross State Product
and $1.2 and $1.4 billion by 2030 (Figure 4). 2020 2030
$0.00

Impact on Industry -$0.20

B illio ns o f D o lla rs
Wyoming’s major economic sectors will be affected by -$0.40 -$0.32
emission caps (Figure 5).4 The current two largest sectors, -$0.60 -$0.44
chemical manufacturing and food products manufacturing, -$0.80
show decreases in output of 6.2% to 7.1% and 1.4% to
-$1.00
2.4%, respectively in 2020. All manufacturing sectors will
suffer output losses of between 2.2% and 3.5% by 2020, -$1.20
-$1.18
while output from energy intensive sectors fall between -$1.40
-$1.39
WY-Low WY-High
10.0% and 13.3%. In addition, the general shift away from -$1.60
coal would result in a 38.9% to 43.0% reduction in coal
production and electricity production would fall by 2.1% to
3.5% (Figure 6). These losses would be significantly higher Figure 5: Impact on Industrial Value of Shipments
by 2030 and would have a lasting impact on Wyoming’s Percentage Change from Baseline in 2020
Figure 5. Percent Change in Output by Industry in 2020
economic base.
0%
-1.4%
Impact on Low Income Families5 -2.2% -2.4%
-5% -3.5%
The impacts of L/W will be felt especially by the poor, who -6.2%
spend more of their income on energy and other goods than -7.1%
-10%
other income brackets. By 2020, higher energy prices mean -10.0%
that low income families in Wyoming (with average -13.3%
-15%
incomes of $14,817) will spend between 17% and 19% of
their income on energy under L/W compared to a projected WY Low WY High
14% without L/W. Others on fixed incomes, such as the -20%
elderly will also suffer disproportionately. MAN EIS CHEM FOOD

Impact on State Budgets6 Figure 6: Impact on Production


Figure 6. Percent Change in Production by
The increases in Wyoming’s energy costs under L/W will Percentage Change from Baseline in 2020
Sector in 2020
impact expenditures throughout the state. Specifically, 0%
-2.1%
Wyoming’s 424 schools and universities and 30 hospitals -3.5%
-10%
will likely experience a 20% to 24% percent increase in
expenditures by 2020 and a 64% to 84% increase by 2030. -20%
For government entities, costs for services, including public
-30%
transportation and vehicle fleets, such as school buses, will
also rise under L/W. -40%
-38.9%
-43.0% WY Low WY High
-50%
Coal Electricity

4
MAN = Manufacturing, EIS = Energy Intensive Sectors; CHEM = Chemical manufacturing; FOOD = Food products manufacturing.
5
These projections assume that the energy expenditures by income quintile in the state are the same as the average for the census division, since there is insufficient
data to accurately calculate this quantity on the state level.
6
These projections assume that the expenditures on schools and hospitals are the same as the average for the census region, since there is insufficient data to
accurately calculate these quantities on the state level.

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