May 12, 2008

Austin American-Statesman
Tony Bennett Opinion: Texans' Jobs Depend on Climate Change Policy

By Tony Bennett

From Capitol Hill and the White House to committee rooms in Austin, the nation is abuzz with talk of climate change and efforts to improve the environment. Texas lawmakers are wise to observe the impact of federal climate change regulations when considering what's right for Texas because, simply, the state can't afford to get it wrong.

Viable climate change proposals must embrace the twin goals of protecting the environment and safeguarding the driving forces of the economy. Short-sighted policies will have a devastating economic toll not only on businesses, but Texas families and beyond. Texas provides goods to the world so policies that affect the manufacturing sector in Texas ripple across the nation and indeed the globe.

In April, the Congressional Budget Office estimated that the Lieberman-Warner carbon regulation bill making its way through Congress will cost more than $1 trillion. The proposal calls for "cap and trade" mandates that will cost more than $90 billion each year from 2012 to 2016, according to the CBO. Under a "cap and trade" program, the Environmental Protection Agency would distribute allowances for emissions of specific quantities of gases like carbon dioxide.

In Texas, the Lieberman-Warner bill will result in a loss of about 100,000 jobs by 2020 and 300,000 jobs by 2030, according to an analysis by the National Association of Manufacturers. Nationally, the bill will cost 1.2 million to 1.8 million jobs by 2020 and 3 million to 4 million jobs by 2030. Job losses will stem from a "cap and trade" program that will force manufacturers to either cut output or buy pricey carbon tax credits, which stifles the ability to maintain work force levels and expand operations.

The Lieberman-Warner "cap and trade" program will also result in higher energy prices for Texas families and state and local governments. A recent study by the National Black Chamber of Commerce and the U.S. Hispanic Chamber of Commerce estimates that almost half of the 3.2 million jobs in jeopardy are held by Hispanic and African Americans. Increased energy costs will also disproportionately affect low-income Texans, who will spend between 19 percent and 20 percent of their income on energy by 2020. The state's 10,337 schools and universities and 622 hospitals will see a 215 percent to 267 percent increase in energy costs by 2030.

Studies of carbon regulation either passed or being considered in other states show similar results. Should the Texas Legislature decide to enact carbon legislation, the impact will be even more severe given the economy's heavy reliance on manufacturing. Since energy costs are already high, passing carbon regulation will ensure that more jobs move out of Texas.

Policies should encourage technology investment to safeguard the environment without decimating the economy. For example, a new law authored by state Rep. Rick Hardcastle calls for a streamlined permitting process at Texas Commission for Environmental Quality for advanced clean energy projects. It provides property tax exemptions for pollution control equipment and abatements for clean energy projects. The objective is to encourage companies to build clean energy facilities and install pollution control equipment. With this law, the Legislature took a step in the right direction.

Proposals moving in the wrong direction duplicate mandates, hamstring progress and make demands for technology that doesn't exist yet. Misguided and unrealistic mandates force employers to divert resources in the near-term rather than promote spending for long-term innovations to reduce greenhouse gases and increase efficiency. Uniform federal legislation that is mindful of economic realities is the only way to avoid a hodge-podge of state regulations that will only hurt our economy, drain family budgets and force jobs out of Texas.