CBO Grossly Underestimates Cost of Cap and Trade

From the page: "Most problematic is the CBO's complete omission of the economic damage resulting from restricted energy use. As footnote 3 on page 4 of the CBO analysis reads, "The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could... more

Reviewed by akarra Jun 25, 08:57am ( 2 reviews ) • heritage.org

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Rated by akarra on Jun 25, 8:57am

From the page: "Most problematic is the CBO's complete omission of the economic damage resulting from restricted energy use. As footnote 3 on page 4 of the CBO analysis reads, "The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap. The reduction in GDP would also include indirect general equilibrium effects, such as changes in the labor supply resulting from reductions in real wages and potential reductions in the productivity of capital and labor."[4] In The Heritage Foundation's analysis of the Waxman-Markey climate change legislation, the GDP hit in 2020 was $161 billion (2009 dollars). For a family of four, that translates into $1,870--a pretty big chunk of change that the CBO is ignoring."

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