Charlotte Chamber of Commerce Legislative Committee Meeting November 11, 2009 Cap and Trade: The...
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Transcript of Charlotte Chamber of Commerce Legislative Committee Meeting November 11, 2009 Cap and Trade: The...
Charlotte Chamber of CommerceLegislative Committee Meeting
November 11, 2009
Charlotte Chamber of CommerceLegislative Committee Meeting
November 11, 2009
Cap and Trade: The Impact on Manufacturing and the North Carolina Economy
Charlotte Pipe and Foundry History
Company founded in 1901 Make cast iron and plastic
pipe and fittings for plumbing Foundry has operated on
Clarkson St. for over 100 years
Plastics Division established in Monroe, NC in 1967
More than 1,300 associates employed in five states
All products proudly made in the U.S.
Still family-owned and operated – 4th generation
Facts About North Carolina Manufacturing*
* National Association of Manufacturers 2008
NC Mfg Output $78 billion
Mfg Share of NC Economy 19.5%
Manufacturing Plants in NC 10,130
Mfg Share of NC Exports 93%
Mfg Employment 514,400
Mfg Employment % Non-Farm 12.5%
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In the last decade, North Carolina has had a net manufacturing job loss of 308,300 (-39.7%).
Since 2002, the Labor Department has certified more than 90,000 jobs in North Carolina as lost because of foreign competition – more than in any other state.
* Bureau of Labor Statistics
Facts About North Carolina Manufacturing*
Historic U.S. Recession
U.S. employment in manufacturing has contracted by more than 2.1 million since the onset of the recession.
From September 12, 2008, the Friday before Lehman failed, to the low of March 9, 2009, the Dow lost 44% of its value.
Massive government spending has quadrupled the budget deficit from $459 billion in 2008 to $1.6 trillion this year – a nearly four-fold increase over President George W. Bush’s 2008 deficit.
Since the start of the recession in December 2007, we have lost 8.2 million jobs.
Unemployment rate has more than doubled to 10.2% and rising.
Waxman / Markey (H.R. 2454)
– The cost of these allowances is a tax, which would rise each year. – As with any tax, it will ultimately be passed on to consumers in the form
of higher energy and product prices.
Energy is the lifeblood of the American economy, 85% of which comes from CO2-emitting fossil fuels.
1,427-page bill tries to control global temperatures by creating a “cap” on GHG emissions, hoping emitters will “trade” emissions permits to meet the cap.
Under the scheme, the government would issue fewer allowances each year, causing the cost of the permits to rise.
Waxman-Markey: Impact on America*
W / M sets targets that would reduce GHG emissions 42% below 2005 levels by 2030 – reaching 83% by 2050. Heritage Foundation predicts the impact on the U.S. in:– Jobs
Loss of an estimated 2.5 million
– Economic Growth Cumulative GDP loss of $9.4 trillion between 2012 – 2035
– Household Income Cost the average family-of-four almost $3,000 per year due to ripple
effect of higher energy prices throughout the economy
Current recession has already reduced emissions by 6%...…at the cost of 8.2 million jobs.
* Heritage Foundation’s Center for Data Analysis
Waxman-Markey: Impact on North Carolina*
Jobs– Loss of between 44,900 - 61,100
Energy Prices by 2030– Gasoline – up 26%– Electricity – up 53%– Natural Gas – up 64%
Household Income– Reduced by $467 – $842 per year by 2030 due
to higher energy prices– NC low income families will spend between
16.8% - 17.6% of their income on energy (compared to a projected 15% without W / M)
* National Association of Manufacturers
Waxman-Markey: Impact on North Carolina*
Industry– All NC manufacturing sectors
will suffer lower output between 4.5% - 5.2% by 2030
– Energy intensive sector output falls 9.6% - 10.5%
Economic Growth– Higher energy prices, fewer
jobs and loss of industrial output will reduce NC’s GSP by an estimated $11.1 - $15.2 billion per year by 2030
* National Association of Manufacturers
* National Association of Manufacturers
Avg. GSP Loss
2012 - 2035
Avg. Personal Income Loss
2012 - 2035
Avg. Non-Farm Payroll Loss
2012 - 2035
Rep Sue Myrick (NC – 9) – $572 – $223 – 2,869
Rep Larry Kissell (NC -8) – $678 – $237 – 2,842
Waxman-Markey: Impact on Charlotte*
W / M would reduce Charlotte jobs and economic growth as well. By way of example, NAM looks at the impact on two Congressional districts in our area:
Carbon taxes under cap and trade will add millions of dollars to our operating costs, making it extremely difficult for us to compete with Chinese imports already at a labor, export subsidy, currency, safety and environmental cost advantage.
Charlotte Pipe is one of only three remaining U.S. manufacturers of cast iron soil pipe and fittings.
Under W/M, the price for all our inputs (electricity, natural gas, fuel, raw materials) would rise dramatically.– Duke Energy predicts our Industrial
electricity rates would increase between 22% ($20 / ton of CO2) to 33% ($30 / ton).*
Waxman-Markey: Impact on Charlotte Pipe
* Duke Energy Carolinas Customer Forum 3/31/09
Waxman-Markey: Impact Climate Change
Estimates based on IPCC data, the Waxman-Markey bill would only impact global temperatures by .044 degrees C (about .09 degrees F) by 2050.
“U.S. action alone will not impact CO2 levels.” – Environmental Protection Agency Administrator Lisa Jackson
“With China and India recently issuing statements of defiant opposition to mandatory emissions controls, acting alone through the job-killing Waxman-Markey bill would impose severe economic burdens on American consumers, businesses, and families, all without any impact on climate.” – Oklahoma Senator Jim Inhofe
“There’s a bias in our Congress and government against manufacturing, or at least indifference to us. If we pass a climate bill the wrong way, it will hurt American jobs and the American economy, as more and more production jobs go to places like China, where it’s cheaper.” – Ohio Senator Sherrod Brown
Waxman-Markey: Impact Climate Change
“We have to have all the major nations in agreement on future progress. If the U.S. passed a cap and trade and other countries did not, it wouldn’t work. It would ruin the U.S. economy and it wouldn’t save the climate either. This is a global issue …
– Dr. Steve Running, co-author of the Nobel Prize winning Intergovernmental Panel on Climate Change, and founder of the Climate Change Studies program at the University of Montana
“Depressed economic growth is what we can expect from the far-reaching climate-change legislation headed for a vote in the Senate. While manufacturers support environmental stewardship, we believe the Waxman-Markey bill would do more economic harm than environmental good."
– Jay Timmons, executive vice president of the NAM
that the economy was the most important issue, while only 4% said global warming. Of those polled, 62% agreed that “economic growth should be given priority, even if the environment suffers to some extent.”
– Pew Research Center found that only 36% believe warming was "because of human activity." Only 36% of those who said they had heard "a lot" about cap-and-trade were in favor; 64% opposed it.
Bill would have a trivially small effect on global warming while imposing substantial costs on all American households.
In poll after poll, Americans have clearly prioritized economic growth over global warming:– A new Public Strategies / Politico poll
found that 45% of respondents said
What Do Americans Think
Recommendation for the Committee
Recommend the Charlotte Chamber adopt a position similar to the U.S. Chamber that supports workable, commonsense, realistic solutions that minimize overall economic impact.
A realistic and environmentally meaningful climate change bill should:– Minimize the impact on major emitters– Reduce price volatility for consumers– Protect global competitiveness– Take advantage of nuclear power / invest in renewable energy sources– Invest in carbon capture and sequestration technology– Increase our own domestic energy security and energy efficiency– Protect against agency regulation under existing laws not written for GHGs
Current bills in the Congress do not meet these criteria and should therefore be opposed.