Impact of the Waxman-Markey Climate Change Legislation on the District of Columbia

Report Environment

Impact of the Waxman-Markey Climate Change Legislation on the District of Columbia

August 19, 2009 2 min read Download Report

Authors: David Kreutzer, Nicolas Loris, Ben Lieberman, Karen Campbell and William Beach

On June 26, a 1,427-page climate change bill introduced by Representatives Henry Waxman (D-CA) and Edward Markey (D-MA) passed the House by a narrow margin. The bill, also known as Waxman-Markey, includes a number of alarming provisions, chief among them a cap-and-trade program that would attempt to curb global warming by imposing strict upper limits on the emission of six greenhouse gases, with the primary emphasis on carbon dioxide (CO2). The mechanism for capping these emissions requires emitters to acquire federally created permits (or "allowances") for each ton of greenhouse gas emitted.

Because these allowances carry a price-and because 85 percent of the United States' energy needs come from carbon-emitting fossil fuels-Waxman-Markey is best described as a significant tax on energy use. Since everything Americans use and produce requires energy, the tax hits U.S. pocketbooks again and again. The Heritage Foundation's Center for Data Analysis forecasts severe consequences, including skyrocketing energy costs, millions of jobs lost, and falling household income and economic activity-all for negligible changes in the global temperature.[1]

Workers and families in District of Columbia may be wondering how cap-and-trade legislation would affect their income, their jobs, and the cost of energy. Implementing Waxman-Markey would put a chokehold on District of Columbia's economic potential, reducing gross state product by $3.61 billion in 2035.

Waxman-Markey Effect

Consumers would be hit hard. Between 2012 (when the restrictions first apply) and 2035 (the last year of this analysis), the prices of electricity and gasoline will rise sharply when compared to prices in a world without cap and trade. By 2035, Americans living in the state of District of Columbia will see their electricity prices rise by $1,556.02 and their gasoline prices rise by $1.30 per gallon solely because of Waxman-Markey.

Economic Indicators

Utility Costs

As the economy adjusts to shrinking gross domestic product (GDP) and rising energy prices, employment will take a big hit in District of Columbia. Beginning in 2012, job losses will be 2,901 higher than without a cap-and-trade bill in place. And by 2035, the economy has still not recovered. Job losses will be 107.

Contrary to the claims of an economic boost from green investment and green job creation and "postage stamp" costs, the Waxman-Markey climate change legislation does the complete opposite by increasing energy prices-thereby causing a considerable reduction in the rate of economic growth, the amount of GDP, household incomes, and employment.

David W. Kreutzer, Ph.D., is Senior Policy Analyst for Energy Economics and Climate Change, Karen A. Campbell, Ph.D., is Policy Analyst in Macroeconomics, William W. Beach is Director of the Center for Data Analysis, Ben Lieberman is Senior Policy Analyst in Energy and the Environment, and Nicolas D. Loris is a Research Assistant in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

[1]Chip Knappenberger, Climate Impacts of Waxman-Markey (the IPCC-Based Arithmetic of No Gain), MasterResource, May 6, 2009, at (August 3, 2009).


David Kreutzer
David Kreutzer

Senior Research Fellow, Energy Economics and Climate Change

Nicolas Loris
Nicolas Loris

Fellow in Energy and Environmental Policy

Ben Lieberman
Ben Lieberman

Senior Policy Analyst, Energy and Environment Thomas A. Roe Institute for Economic Policy Studies

Karen Campbell


William Beach

Senior Associate Fellow