Bismark Tribune | By Brian Gehring
Virtually all areas of North Dakota’s economy would suffer if the proposed cap-and-trade legislation is passed into law, according to a newly-released study.
The study is a joint project of the North Dakota Policy Council and the American Council for Capital Formation, an economic authority on energy and environmental policy issues.
Brett Narloch, executive director of the North Dakota Policy Council, said as a public policy research group, his organization feels it is vital all residents comprehend what’s at stake for the state if the legislation is passed.
“Obviously cap-and-trade is a huge, huge issue for North Dakota,” Narloch said. “That goes without saying.”
The study, released publicly for the first time Wednesday, was presented by Margo Thorning, an economist who has served at the Department of Energy, Department of Commerce and Federal Trade Commission.
Thorning said while the end result of cap-and-trade, also known as the Waxman-Marky Bill, would take a generation to be realized, it would be dramatic.
“The economic consequences of this bill are not evident immediately,” Thorning said.
In short, the federal government would limit, or cap, how much carbon dioxide such energy producers as utilities and refineries could release into the atmosphere.
In the next 40 years, companies would need permits for each ton of CO2 emitted. More efficient companies could sell or trade their permits to companies that are more reliant on such fossil fuels as coal or oil. Thorning said, in essence, it would result in little more than a wealth transfer between energy producers, putting North Dakota at a distinct disadvantage because of its lignite industry.
She said if the reduction of green house gases (GHG) is the goal, cap-and-trade would do little to reduce emissions.
Thorning said models show that the United States’ emissions of
CO2 will remain relatively flat through 2095 while developing countries like China and India will continue to add more and more GHG without improved technology.
Thorning said that type of technology is 10-15 years away from being a reality.
She said the study estimates only a 0.3 percent reduction in GHG by the target date of 2050.
‘What are the benefits of adopting the Waxman bill?” Thorning said.
“My impression is there are very few benefits.”
She said further cost/benefit analysis is needed and leveling a new carbon tax would be easier to administer.
In worst-case scenario, the study shows if cap-and-trade passed, North Dakota would lose between 5,000 and 7,000 jobs by 2030, the gross state product would be reduced by as much as $3.1 billion and state budget revenues would drop between $220 million and $310 million.
The study further showed that costs of gasoline would increase by 24 percent, electricity by 64 percent and natural gas up to 77 percent by 2030.
In short, Thorning said North Dakota “would be near the top of the list” of states impacted by cap-and-trade legislation.