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Economic Perspective

American Clean Energy and Security Act

by Susan Combs

Susan Combs at podium...But the cap and trade provisions of the American Clean Energy and Security (ACES) Act of 2009, sometimes called Waxman-Markey, will have a significant impact on Texas families, businesses, and consumers....

...“Skyrocketing” energy prices will have a disproportionate affect on the Texas economy.

Read entire article by Susan Combs

What Cap and Trade Could Mean for Texas Businesses

Cap and trade legislation would raise the cost of doing business for Texas companies of all sizes and types. From the newest start-up to the established Fortune 500s corporations, they'll all pay more to produce, store and ship their products and more for employee health care costs. And because Texas produces so many goods that consumers throughout the country depend upon, the ripples will be felt far and wide.

In total, more than 32,000 Texas businesses are in industries identified as greenhouse gas emitting, and they could be subject to some level of additional regulation under proposals currently being considered. The state’s oil and gas industry — which employs nearly 375,000 Texans and contributes 14.9 percent to the gross state product — will be particularly hard hit.

If cap and trade started today, the average Texas business (across all industries) could expect to spend close to $30,000 more a year – with businesses in some industries facing far steeper costs than others:

Business Category
Number of Texas Businesses Annual Cost Increase per Business (2009 Dollars)
Manufacturing 23,950 $242,962
Mining 8,372 $156,771
Utilities 1,826 $126,291
Information (i.e., Publishing and Telecommunications) 9,811 $92,453
Management of Companies and Enterprises 2,135 $59,168
Transportation and Warehousing 17,507 $46,985
Real Estate and Rental & Leasing 25,634 $38,732
Finance and Insurance 35,112 $30,959
Wholesale Trade 42,324 $20,520
Arts, Entertainment, and Recreation 5,942 $14,538
Administrative and Waste Services 29,327 $13,563
Educational Services 4,975 $13,552
Health Care and Social Assistance 52,165 $13,044
Construction 45,574 $12,535
Retail Trade 71,166 $11,744
Accommodation and Food Services 40,297 $11,095
Professional and Technical Services 67,026 $9,642
Other Services, except Public Administration 52,702 $5,634
Forestry, Fishing, Related Activities, and Other 9,451 $2,062
Total 545,296
Average Cost Increase Across All Businesses $29,736

Sources: U.S. Bureau of Economic Analysis, Economic Modeling Specialists, Inc., REMI software, and calculations by the Texas Comptroller of Public Accounts.

Download Cap and Trade: Potential Impact on Texas (PDF)

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