The careful design of a policy to cap greenhouse gases will be key to ensuring any resulting economic burden is shared equally across industries and regions, according to Congressional Budget Office Director Doug Elmendorf who testified before the Senate Energy and Natural Resources Committee Wednesday.
Transitioning to a low-carbon economy— the essential goal of a carbon dioxide cap-and-trade program —would probably mean some growing pains in the form of job losses in fossil-fuel intensive industries, according to Elmendorf.
"The fact that (renewable energy) jobs turn up somewhere else for some people does not mean that there aren't substantial costs borne by people, communities, firms in affected industries in affected areas," he said.
A nationwide climate and energy policy means different things to different regions both in terms of industry and consumers. The U.S. covers a vast expanse of land and industries are built around a variety of resources— with a variety of CO2 emission outputs. Moreover, energy consumption in homes and businesses varies across the country depending upon climate and available energy sources. (Check out a great interactive map that illustrates the differences from NPR.)
Such regional discrepancies have been the focus of research here at RFF, including this 2008 discussion paper from researchers Dallas Burtraw, Margaret Walls and Richard Sweeney, and a recently-published study in the journal Climatic Change.
In “Regional Patterns of U.S. Household Carbon Emissions,” RFF Nonresident Fellow James Sanchirico and coauthors Billy Pizer and Michael Batz use consumer expenditure data covering 1984–2000 to estimate the short-run geographical impacts of a hypothetical $10 per-ton tax on CO2 at a county level.
According to the authors, U.S. households, on average, spent almost $4,000 per household on electricity, fuel oil, natural gas, and gasoline in 2005, with expenditures varying considerably across regions and subpopulations. Substantial differences across regions lead to the direct impacts of the tax ranging from $97 dollars per year per household in Manhattan to $235 per year per household in Tensas Parish, Louisiana.
Read more about Regional Patterns of U.S. Household Carbon Emissions here.
Tiffany Clements is managing editor of Weathervane.
