EU-Style Energy Policies Would Raise Prices, Reduce Employment In The United States
The European Union (EU) has suggested very aggressive carbon emissions reduction targets. This election year, some candidates in the United States have adopted very similar policy proposals. What would happen to energy prices in the United States if policymakers take steps to agree to those proposals? According to the U.S. Chamber of Commerce’s Institute for 21st Century Energy, European-style mandates would:
- Cost the U.S. residential sector $676 billion;
- Lead to an average household energy cost increase of $4,800 per year; and
- Lead to the elimination of 7.7 million jobs in the United States.
The Institute looked at seven key states (Colorado, Florida, Illinois, Indiana, Michigan, Ohio, and Wisconsin) to further illustrate how a more aggressive emissions reduction plan would affect American households and the U.S. economy. According to the analysis, Florida would lose the most jobs (employment there would be cut by nearly 350,000 jobs) while households in Indiana would face the greatest price increases ($5,430 per year).
The Institute identified four key factors that make energy more costly in the European Union: 1) restrictions that inhibit access to low-cost, existing electricity supply and oil and natural gas supplies; 2) more generous subsidies provided by EU members for uneconomic technologies; 3) EU policies that place a tax on carbon emissions; and 4) much higher taxes on energy consumption. Over the last several years these factors have driven EU prices “to rates that are 1.6 to 2.4 times greater than U.S. prices per unit of energy consumed.”