Chamberlain Economics, LLC for the Institute for Energy Research (Policy Study No. 2010-06) / by Andrew Chamberlain and Feliz M. Ventura
[From IER press release] In an effort to better understand the broad consequences of the Kerry-Lieberman American Power Act on the U.S. economy, the Institute for Energy Research commissioned Chamberlain Economics, L.L.C to perform an economic and distributional analysis of cap-and-trade portion of the proposal.
The following represent some of the study’s key findings:
- The American Power Act would reduce U.S. employment by roughly 522,000 jobs in 2015, rising to over 5.1 million jobs by 2050.
- Households would face a gross annual burden of $125.9 billion per year or $1,042 per household, with costs disproportionately borne by low-income households.
- On a net basis, the top income quintile will benefit financially, redistributing to these households roughly $12.3 billion per year from the bottom 80 percent of earners.
- Households over age 75 bear the largest burden at 2.3 percent of income, followed by households aged 65-74 and under age 25 at 2.1 percent. By contrast, the nation’s highest-earning households between age 45 and 54 years would bear the smallest percentage burden of just 1.5 percent.
- Contrary to the legislation’s stated goal of reducing price volatility by excluding petroleum refiners from quarterly auctions, the Kerry-Lieberman bill is likely to significantly increase allowance price volatility from quarter to quarter, compared to an ordinary auction in which all covered industries bid for allowances.
[See also: Michael A. Levi’s rebuttal to this report: http://blogs.cfr.org/levi/2010/06/30/ier-study-is-wrong-on-kerry-lieberman/] as well as the Institute for Energy Research’s response to this rebuttal and Levi’s July 2 response to their rebuttal of July 1: http://blogs.cfr.org/levi/2010/07/02/responding-to-andrew-chamberlain/. ]
Other analyses of Kerry-Lieberman: