U.S. Chamber says new EPA rule could cost economy $51 billion a year
Signaling growing industry opposition to the Obama administration’s forthcoming proposal to curb carbon emissions from power plants, the U.S. Chamber of Commerce warned in a report Wednesday that the climate-change rule could cost the economy tens of billions of dollars in lost investment and millions of jobs.
The Environmental Protection Agency is expected Monday to unveil regulations that would push states to make significant cuts in pollution from coal generators, which account for about 40% of all greenhouse-gas emissions in the country.
Although the size of the proposed reduction has yet to be announced, the chamber’s report estimated that such a rule could result in an average annual drop of $51 billion in economic output and 224,000 fewer jobs every year through 2030, with the Southeast feeling the biggest pinch.
The chamber said the numbers were based on modeling from the economic research firm IHS, using assumptions that the regulation would set a 42% reduction in greenhouse-gas emissions by 2030 from 2005 levels — an aggressive percentage that is close to a target previously cited by President Obama.
Some analysts noted, however, that the chamber’s economic analysis doesn’t take into account the gains in productivity, among other benefits, in employing pollution-cutting technologies and shifting to cleaner sources of energy.
EPA spokesman Tom Reynolds took issue with the chamber’s cost numbers. In a blog statement, he said the report assumes that under the proposal, states would need to require so-called carbon capture and sequestration technology for natural gas plants.
“That’s not true,” he wrote, noting that three-fourths of the chamber’s cost estimates come from power plant construction.
Even if the chamber’s projections are true, some economists said, a $51-billion drop in output amounts to peanuts for an American economy with an annual gross domestic product of about $15 trillion.
“It sounds ominous, but it’s tiny,” said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. Of the estimated hit to jobs, he said: “We added 288,000 jobs last month alone.”
The chamber’s report is the latest in what could be a mounting campaign this summer to challenge the administration’s proposal from groups representing energy and other U.S. industries, as well as politicians in coal-strong states.
The EPA rule on fighting coal pollution, a key element of Obama’s initiative on climate change, is expected to be completed by June 2015.
This spring, the American Coalition for Clean Coal Electricity, which represents coal mining companies, issued a report warning that the EPA proposal could cause electricity prices to rise in many states and cost nearly 3 million jobs.
In releasing the chamber’s report, Karen Harbert, chief executive of the group’s Energy Institute, wouldn’t say what actions her organization was planning to take in response to the upcoming proposal.
“But should our analysis be overlooked or ignored,” she said, “we will reserve all options.”
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