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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 Households

If the U.S. Congress enacts cap and trade legislation, Texans will feel the effects in their pocketbooks.

For the average Texan family, it would add nearly $100 a month to their living expenses. They’ll pay more to fill up the gas tank, more to cool or heat their homes, and more every single time they visit the grocery store.

And who would bear the lion’s share of the burden? Those who can least afford it. The Congressional Budget Office estimates that U.S. households in the bottom 20 percent of income will pay 2.5 percent of their hard-earned money for cap and trade-related add-on expenses — while those in the middle would take a hit of 1.2 percent. Americans at the top rungs of the income ladder will see 0.7 percent of their earning take a hit.

The current bill being reviewed by Congress includes assistance programs that would offset some of these cost increases such as energy rebates and tax credits for households below certain low-income thresholds. Analysis is continuing to determine if these offsets will be distributed fairly and equitably for all Texans.

Where it could hit Texans’ wallets:

  • Food — agriculture producers will pay more for fuel and fertilizers to grow crops.
  • Diapers, plastics, cell phones, computers, golf balls, footballs, etc.
  • Health Care
  • Housing

If cap and trade started tomorrow, the typical Texas family could expect to spend up to $1,136 more total on goods and services a year:

Major Spending Categories
Annual Cost Increase
Health Care
Groceries and Dining
Transportation (gas, auto-related purchases)
Recreation, Travel and Entertainment
Legal and Financial Services
Household Utilities
Clothes, Shoes and Accessories
Furniture and Household Supplies
Religious and Welfare Activities
Education and Research
Personal Care

For analysis purposes, our average Texas family has 3.4 people and is defined by the U.S. Census as two or more related people living in a household.
Sources: Bureau of Economic Analysis, Census Bureau, REMI software, and calculations by the Texas Comptroller of Public Accounts.

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