May 22, 2008

May 22, 2008 | WebMemo on Energy and Environment

Effect of the Lieberman-Warner Global Warming Legislation on States

The Senate's leading climate-change bill, while aiming to combat global warming by reducing carbon dioxide in the air, actually poses "extraordinary perils" for Americans and the economy, according to a new study from The Heritage Foundation. The study, produced by Heritage's Center for Data Analysis (CDA), forecasts severe consequences-including crushing energy costs, millions of jobs lost and falling household income-if Congress enacts the so-called Lieberman-Warner bill.

The bill, which attempts to cap greenhouse gas emissions, with emphasis on carbon dioxide (CO2), creates federally allotted permits, or allowances, for each ton of CO2 emitted. The cost of allowances paid by emitters will have similar effects of a massive energy tax and will result in significantly higher energy costs. Lieberman-Warner (S.2191) relies heavily on an unproven technology, capturing carbon and sequestering it[1]. Even with the most generous assumptions - presuming that carbon capture and sequestration is commercially developed in 10 years - the economic costs for the average American are staggering. Under a more realistic scenario, the economic impacts in terms of losses in the job market, losses in household budgets, and higher energy prices will be drastically higher. To make matters worse, there will be inconsequential effects on the environment to show for it, if any.

Inevitably the bill will affect each state differently. Some states are more energy-intensive than others and some rely a great deal on manufacturing to fuel its economy. Regardless, the costs in every state are significant. Increases in electricity, gasoline and natural gas paired with decreases in personal income are a dreadful site for any American. Moreover, the projected losses in jobs and Gross State Product (GSP) illustrate how each state's economy will be operating well under its potential directly because of the Lieberman-Warner bill. What follows are 50 state-by-state breakouts of the impact the bill would have on jobs and the economy.

Alabama (chart)
Alaska (chart)
Arizona (chart)
Arkansas (chart)
California (chart)
Colorado (chart)
Connecticut (chart)
Delaware (chart)
Florida (chart)
Georgia (chart)
Hawaii (chart)
Idaho (chart)
Illinois (chart)
Indiana (chart)
Iowa (chart)
Kansas (chart)
Kentucky (chart)
Louisiana (chart)
Maine (chart)
Maryland (chart)
Massachusetts (chart)
Michigan (chart)
Minnesota (chart)
Mississippi (chart)
Missouri (chart)
Montana (chart)
Nebraska (chart)
Nevada (chart)
New Hampshire (chart)
New Jersey (chart)
New Mexico (chart)
New York (chart)
North Carolina (chart)
North Dakota (chart)
Ohio (chart)
Oklahoma (chart)
Oregon (chart)
Pennsylvania (chart)
Rhode Island (chart)
South Carolina (chart)
South Dakota (chart)
Tennessee (chart)
Texas (chart)
Utah (chart)
Vermont (chart)
Virginia (chart)
Washington (chart)
West Virginia (chart)
Wisconsin (chart)
Wyoming (chart)

How Lieberman-Warner Would Affect the Price of Gasoline (chart)

About the Author

William W. Beach Director, Center for Data Analysis and Lazof Family Fellow
Center for Data Analysis

David W. Kreutzer, Ph.D. Senior Research Fellow, Energy Economics and Climate Change
Center for Data Analysis

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

Nicolas Loris Herbert and Joyce Morgan Fellow
Thomas A. Roe Institute for Economic Policy Studies

Show references in this report

[1]Carbon capture and sequestration (CCS), also known as carbon storage, is being explored as a way to reduce greenhouse gases. According to the World Resources Institute, "CCS requires capturing carbon dioxide from power plants and other industrial facilities, transporting it to suitable locations, injecting it into deep underground geological formations, and monitoring its behavior.... [T]here are no widely approved standards for...CCS projects." See World Resources Institute, "Carbon Capture and Sequestration (CCS)," at (April 30, 2008).