US oil and gas workers have extra reason to find interesting the Congressional Budget Office’s confirmation that cap-and-trade legislation passed by the House of Representatives would diminish employment.
A disproportionate number of job losses would occur in their industry.
CBO Director Douglas W. Elmendorf told the Senate Committee on Energy and Natural Resources on Oct. 14 that a House climate-change bill passed in June would suppress economic growth and employment.
Pointing out losses against expectations without cap-and-trade would be small relative to overall economic growth, he nevertheless refuted claims that the bill would do no damage at all.
He said implementation of the House bill would lower gross domestic product from what it otherwise would have been by 0.25-.75% in 2020 and by 1-3.5% in 2050.
“CBO projects that real (inflation-adjusted) GDP will be roughly two and a half times as large in 2050 as it is today, so those changes would be comparatively modest,” Elmendorf said in written testimony.
Aggregate loss of household purchasing power would be 0.1% in 2012 and 0.8% in 2050, averaging 0.4% over the entire period.
The bill, Elmendorf said, “would probably have only a small effect on total employment in the long run.” Because it would “shift production, investment, and employment away from industries involved in the production of carbon-based energy and energy-intensive goods and services,” however, oil and gas workers can take no comfort.
“The industries that produce carbon-based energy—coal mining, oil and gas extraction, and petroleum refining—would probably suffer significant employment losses over time,” the CBO chief warned.
Elmendorf didn’t focus any further on refining, but job losses in that industry might be extreme. The bill makes refiners responsible for nearly half of all required emission cuts but allocates to it a relatively tiny share of total emission allowances. The costs would be huge.
Elmendorf pointed out that a cap-and-trade system would open career fields in emerging energy industries.
Indeed, unofficial reports from the field indicate that people who like being outdoors and are comfortable with height have no trouble finding work scraping bird droppings off windmill blades.
(Online Oct. 16, 2009; author’s e-mail: email@example.com)