CBO Director: There are Costs Involved with Cap and Trade
Nicolas Loris /
Congressional Budget Office Director Douglas Elmendorf testified on October 14 before the Senate Committee on Energy and Natural Resources to discuss the economic effects of reducing greenhouse gas emissions and the effects – most notably the effects of the Waxman-Markey cap and trade legislation. Although Elmendorf felt that Waxman-Markey could greatly reduce the long-term risks of climate change, he acknowledged that “such legislation would also reduce economic activity through a number of different channels.”
Note: Director Elmendorf’s expertise is budgets and economics, not climate science.
Some of the channels mentioned the CBO director’s testimony include: shifting production, investment, and employment away from lower cost carbon-based energy industries and carbon energy-intensive goods and services towards higher cost alternatives; reducing productivity of existing capital and labor, reducing household income, discouraging investment both domestically and from international sources, and reducing employment and workers’ real wages.