If pending federal climate change legislation is enacted, Louisiana would stand to lose between 26,066 and 35,500 jobs by 2030, according to a study by the Pelican Institute for Public Policy and the American Council for Capital Formation (ACCF).
The primary cause of job losses is lower industrial output due to higher energy prices, the high cost of complying with emissions cuts required by the legislation, and greater competition from overseas manufacturers. Among the hardest hit would be manufacturing jobs.
“As Congress considers far-reaching energy legislation that would impose an aggressive ‘cap-and- trade’ system, it’s important for us to examine what this means for Louisiana families and businesses,” said Kevin Kane, president of the Pelican Institute for Public Policy. “It’s clear from these findings that the impact would be devastating for our fragile economy – slashing jobs and inflicting damage on the energy industry-the economic engine for our recovering state.”
The economic impact of this legislation on Louisiana is not isolated to jobs:
· By 2030, the average Louisiana family can expect the price of electricity to increase by up to 54 percent, gasoline 26 percent and natural gas 77 percent. Low income families and the elderly, who spend a disproportionate amount of their income on energy, will be especially hurt. Disposable income in Louisiana would fall between $485 and $874 by 2030.
· Under this legislation, Louisiana would experience a sharp decrease in manufacturing output. Higher energy prices, fewer jobs and loss of industrial output are estimated to cause a $5.1 to $6.9 billion reduction in Louisiana’s gross state product (GSP) in 2030.
· State tax revenues would be reduced by as much as $690 million by 2030, forcing Louisiana policymakers to make hard choices about how to fund basic services, such as law enforcement and Louisiana schools.
For decades, Louisiana’s economy has benefited from growth in chemical manufacturing and oil and gas industries, operating among the top oil and chemical producers in the nation. Louisiana is the leading oil producing state and ranks second in the nation in natural gas production, responsible for contributing close to $1 trillion to the U.S. economy. Since Hurricane Katrina, the role of the energy industry as the economic engine of this recovering state has become more important. If pending energy legislation were enacted, this continued growth and recovery would be impossible.
“Previous research about the impacts of this legislation on the national level found significant loss to gross domestic product. As a state whose economy is closely tied to the chemical, oil and gas industries, Louisiana is particularly vulnerable,” said Margo Thorning, Ph.D., senior vice president and chief economist of ACCF, who recently testified on Capitol Hill. “If pending federal energy legislation is enacted, the Louisiana economy will significantly decline and tens of thousands of jobs will be lost.”