Economic Perspective
American Clean Energy and Security Act
by Susan Combs
...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.
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.