Cap and trade bill stirs controversy over jobs in U.S.
WASHINGTON -- After the U.S. House passed a bill on Friday for cleaner emissions, heated debate continues over the historic but controversial new legislation.
A major issue is jobs -- supporters say it will create them, but opponents say it will wreak havoc on the economy and boost unemployment.
The U.S. House of Representatives narrowly approved the American Clean Energy and Security Act, also known as the Waxman-Markey bill, by a margin of 219 to 212. If made into law, the legislation will create a cap-and-trade plan of pollution permits to curb emissions.
Under the system, companies buy permits to emit carbon and the government sets limits on the amount of carbon dioxide that can be emitted nationwide.
U.S. President Barack Obama, whose administration has made clean energy a top priority, told reporters the bill "ushers in a critical transition to a clean energy economy without untenable burdens on the American people."
But opponents say it will amount to a heavy tax on industry that will put people out of work.
Over time, the cap becomes more stringent to reduce carbon emissions, causing the cost of permits to surge and forcing factories to relocate to Asia, critics said.
Dan Ziegler, U.S. House relations deputy at the Heritage Foundation, a Washington D.C. think tank, cites a Heritage study that projected the bill will reduce gross domestic product by 350 billion dollars and cut 2.5 million jobs by 2030.
That is because the legislation requires an 83-percent drawdown of carbon emissions by 2050, he said. Factories will see their energy costs skyrocket and will relocate overseas, he said.
Obama, however, said in a radio and Internet address on Friday that such claims are inaccurate.
"Don't believe the misinformation out there that suggests there is somehow a contradiction between investing in clean energy and economic growth," he said. "It's just not true."
The Center for American Progress, another Washington D.C. think tank, conducted a study that said the bill, coupled with the stimulus act, can generate around 150 billion dollars per year in new clean energy investments -- some from government but mostly from the private sector -- over the next decade. That will result in around 1.7 million new net jobs. Clean energy investment generates three times more employment than if that sum were spent on carbon-based fuels, the center said.
Those gains would be sufficient to cut the unemployment rate by one percentage point, the study said.
Moreover, jobs will not come at the expense of employment in high carbon industries, and skills are transferable to the renewable energy sector, proponents said.
The stimulus package included 24.4 billion dollars in federal government spending to promote energy efficiency and 25.3 billion for renewable energy, the center noted.
Patrick Creighton, spokesman for the American energy alliance, countered that most of the new jobs will be unsustainable.
"You may have some jobs gain in the short run but in the long run they will go abroad," he said.
Other experts said the bill could impact some areas particularly hard.
Ziegler said the Midwest -- a region more reliant on coal than elsewhere -- will fare poorly under the legislation, since the bill requires states to devote 15 percent of their energy resources to renewable energy. Manufacturing will be hit hard, he said.
Others said the legislation could crush the coal industry.
Ziegler said those losses will trickle down to a myriad of industries including wholesale and retail.
Benjamin Goldstein, a policy analyst with the Center for American Progress, however, said the new jobs will be virtually impossible to ship abroad.
Under the plan, many commercial and industrial buildings will be refurbished -- workers will install new windows, installation and make other adjustments -- to make them more energy efficient, he said.
New projects to build and install wind turbines will employ a myriad of professionals and tradespersons including engineers, electricians and construction workers, as shipping wind power equipment from abroad is more costly than building it in the United States, he said.
Erecting turbines requires long haul truckers to transport components, workers to prepare the site and crane operators to stand up the poles. Mounting the turbine's rotor also requires highly skilled workers, he said.
"The jobs will be sustainable for decades on end," he said.
Constructing a wind farm, which often requires hundreds of turbines, takes about a year, compared to a decade for a coal mine, he added.
Creighton, however, pointed to some European countries that have already moved their windmill operations to Asia because of high labor costs, and said the same could happen in the United States.
Besides concerns over unemployment, critics said the bill will amount to the government propping up renewable energy industries, which they feel would be otherwise unprofitable. Carbon energy is still the most efficient way of producing and storing energy and an integral part of the U.S. economy, they noted.
Lisa Margonelli, fellow at the New America Foundation, another Washington D.C. think tank, countered that the government has invested in young industries before and that this time around is nothing unusual.
And a low carbon economy is crucial to remaining globally competitive, as current energy costs are hurting companies' profits, she said.
Indeed, Japan, China and European Union countries are investing heavily in clean energy and the United States may find itself lagging if the government fails to take action now, she said, adding that the government must also be wary of backing technologies that may later prove unviable and should choose goals, not the vehicles to reach them.
Referring to the ethanol boom and subsequent bust, she said: "Once you choose something like corn ethanol, you get a crazy explosion of economically unviable corn ethanol plants that are now closing."