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Study shows state would suffer from cap-and-trade

By Louisa Barber

Sidney Herald
Published on Tuesday, February 16, 2010 3:00 PM MST

Montana’s future looks grim if federal climate change legislation is enacted. On Thursday, the Bozeman-based think tank Montana Policy Institute and the American Council for Capital Formation released a study that revealed Montana could lose between 4,964 and 6,761 jobs by 2030.

Carl Graham, president of the institute, told the Herald earlier this week the economy would falter sharply due to the state’s heavy dependence on manufacturing plants and energy development, a couple prime targets of cap-and-trade.

“It shows that there’s no free rides when it comes to reducing greenhouse gases,” Graham said. Montana will be disproportionately affected and a “definite net loser” if legislation goes into effect.

Graham said that, as a manufacturing state, the economy will hurt because as the cost of energy rises, so will the cost of manufacturing, therefore there’ll be less money coming into the state. Proposed legislation will also hit pocketbooks because as one of the poorest states, increased energy bills take more from Montanans, which results in less disposable income. That will hit “especially hard.”

Cap-and-trade itself seeks to cap and reduce greenhouse gases significantly over the next 40 or so years and increase the cost of fossil fuels. Companies that emit greenhouse gases the most, like oil and coal, would purchase “credits” if they go over the amount of emissions allowed.

The recent study shows some startling figures. In a press release by the institute, among the findings include:

• By 2030, the average Montana family could expect the price of electricity to increase by up to 61 percent, gasoline 27 percent and natural gas 78 percent. Low income families and the elderly, who spend a disproportionate amount of their income on energy, will be especially hurt. Disposable income in Montana would fall by $414 to $764 in 2030.

• Under this legislation, Montana would experience a sharp decrease in manufacturing output, especially in nonmetallic mineral product manufacturing and primary metal manufacturing, important sectors for the Montana economy. The higher energy prices, fewer jobs and loss of industrial output under this legislation are estimated to reduce Montana’s gross state product by as much as $900 million to $1.2 billion in 2030.

• State tax revenues would be reduced by as much as $65 million by 2030, forcing Montana policymakers to make hard choices about how to fund basic services, such as law enforcement, hospitals and schools.

Graham, whose institute is releasing the findings to media outlets in the state, said he hopes Montanans will consider the study as they make their decisions regarding climate legislation.

If the economy kills jobs, Graham said, doing that will do nothing about decreasing greenhouse gases, but increasing the cost of fossil fuels will cause jobs to go overseas where manufacturing can be done cheaper.

“It’s clear from these findings that the impact would be devastating for our economy,” he said, “slashing jobs and reversing all the progress we’ve made, especially in the development of our state’s natural resources.”

The study is available for viewing at www.montanapolicy.com.

reporter@sidneyherald.com

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Comments

The following are comments from the readers. In no way do they represent the view of the Sidney Herald.

wrote on Feb 24, 2010 7:43 AM:

" Rebel-
It is interesting that you bring up the dark ages, since it has been proven that global warming was a proximate cause of it. "

rebel with a cause wrote on Feb 21, 2010 3:35 PM:

" This man made climate change theory is nothing more then an attempt to create a phoney threat to mankind so the world can be united under a one world government that will have no regard or respect for individual rights and freedoms or even human life for that matter. It will become a new dark ages and they will tax the very air that we breathe. "

Geary wrote on Feb 20, 2010 6:46 PM:

" Here's my thinking: the climate may very well be changing, it always is. The question is: Are we causing it? The evidence is inconclusive. But there is a whole bunch of money to be made off of the "green movement." Some of it is sound science(as a Christian, I think it behooves us to be good stewards of ALL He has created, since we will be held accountable individually and as nations for what we do.) There are people who would like to see EVERYONE go back to mud huts and rickshaws, devastate our economy and to the devil with those who can't adjust(somehow thinking that it justifies their own place in "evolution". The funny thing is that those who tout evolution so heavily don't understand that they themselves are part of the evolutionary chain too, and if they themselves die off, then, "it's a good thing" as Martha Stewart would say.

I would say that IF there is a such a thing as the "greenhouse effect" then it would probably work in REVERSE, and SHUT OUT the source of heat for our planet, WHICH IS THE SUN, and we would all eventually freeze. Hmmm....
One thing I'm NOT in favor of is giving up our national sovereignty to some "global commune authority" to establish economic and public policy. There is no way of knowing whether their priorities and values are even close to our own. WE ASSUME WAY TOO MUCH!! "

Mr. Clean wrote on Feb 20, 2010 11:13 AM:

" Cap and Trade = Redistribution of Wealth.
Cap is capping CO2 emissions levels for business and charging a fine or tax for going over the cap.
Trade is trading carbon credits on Wall Street, so a company can buy carbon credits if it goes over the cap, from other companies that are under the cap.
It all sounds fine and dandy until you see the cap is so low most companies will not be able to operate under the cap, so they will have to buy credits and pay fines, and the bottom line is the consumer will pay higher prices for products and services.
Plus the climate will still change no matter how much we tax business. Nothin like a good hoax, right folks. "

What wrote on Feb 20, 2010 10:35 AM:

" Well if you don't believe that the climate issue needs to be addressed than you're stupid.I can't believe morons have turned a scientific matter into a political one only because they don't like the political party that endorses it.That is the reality of the whole issue.If you gain your thoughts from a Super Bowl commercial you seen on t.v. you couldn't possibly have many brain cells anyway.Glaciers that have been around for millions of years don't just start disappearing for no reason nor do the polar caps and that is indisputable but I'm sure some political genius living in Sidney will say "that's not happening".I don't believe the planet will self destruct tomorrow due to the climate issue but to deny it simply because it may cost you is foolish.If a political figure you seem to think is worthy of your support were to stand up and say the climate issue is for real you would be right on board with them because you can't think for yourself,you let politicians and media blowhards tell you how to think.I'm sure some tool out there will have something to say,but I've said what I came on here to say and won't be looking for a reply so don't bother.Reality is what it is. "

wrote on Feb 17, 2010 4:12 PM:

" Cant belive someone actually used this arguement here!
Forget all the reems of research you can mine, lets talk pop culture. When this arguement got started, there was a disaster movie based on climate change (day after tomarrow) Does anyone remember the basis of that plot was extreme ICE SNOW AND COLD on the east coast? "

My thoughts wrote on Feb 17, 2010 10:52 AM:

" Okay bias, so you think cap & trade is going to be a good thing? Any company that has to pay for carbon credits will pass that cost on to their customers. That means you and I will bear the brunt of this tax. Every business, grocery store, hardware store, manufacturer, etc., will be affected and they will pass those costs on. The article simply stated the facts about what will be the result of passing those costs on. Jobs will be lost, things will cost more, and you will have less money at the end of the month.

And that is if you believe in global warming. Did you notice they have changed their terminology now to climate change because they can't prove warming? I think the super bowl commercial about the "green police" was right on target. As citizens we need to take a stand or that funny commercial may become our reality. It won't be nearly so funny then. "

wrote on Feb 16, 2010 9:00 PM:

" Isnt this an exact quote from Orwells 1984?
We cant stop killing each other, too many people count on the income. "

bias wrote on Feb 16, 2010 5:54 PM:

" I really hope the Herald puts some effort into getting information from sources with other political leanings. While I am not arguing with the findings, I am frustrated that the sources cited are both very conservative think thanks. I think there is more research out there that shows some of the positive impacts of cap and trade, including americanprogress.org/issues/2008/01/capandtrade101.html. I know this is a political topic and politics wont be left out, but at least get a bigger picture or file it under "opinion". "

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