The people of

Illinois
will be hurt by the Waxman-Markey Climate Bill.
The climate change bill under consideration by Congress ignores the impacts on everyone who uses or produces petroleum fuels like gasoline, diesel and natural gas. So it will hit both households and businesses hard – everyone who uses cars, trucks, planes, trains, and tractors or the thousands of products produced or transported using these fuels. It will create an uneven playing field for U.S. refiners who will lose market share and jobs to foreign competitors who do not have to limit their own greenhouse gas emissions. Higher prices: The bill will touch every family and every business that uses oil products. According to one government analysis, the bill will raise prices to $5.10 per gallon for gasoline and $5.60 per gallon for diesel fuel.1 Less disposable income: According to the Energy Information Administration (EIA), average household energy costs could increase as much as $1,870 in 2030.1 That’s 5.3 percent of today’s average per capita disposable income.2 Fewer jobs and lower wages: EIA’s study, as well as those commissioned by the National Black Chamber of Commerce, the National Manufacturers Association and the American Council for Capital Formation all reach the same conclusion about jobs – that as a consequence of this legislation, there will be more than 2 million fewer jobs in 2030, even with new green jobs created.3 One analysis expects the wages of workers who remain employed to fall and for the loss to become greater over time.4 Another analysis shows that the unbalanced approach of the bill by itself will produce additional unemployment, destroying more than 2 million jobs nationwide as soon as 2011.5 For Illinois this could mean a loss of 71,273 jobs over the next couple of years. If those jobs were lost today, it would increase Illinois’ unemployment rate from 10.1 percent to 11.1 percent.6 Less wealth: One analysis projects the bill would reduce aggregate gross domestic product (GDP) by $9.4 trillion over the next 26 years.5 For Illinois this could mean a reduction of as much as $14 billion in our state’s gross state product (GSP) on average over this period.7 Less energy security: U.S. refiners will have to buy a disproportionate share of new allowances, increasing their costs and giving a competitive advantage to non-U.S. refiners. One analysis concludes that as a result of this legislation, fuel imports will double by 2030 from what they would have been.8 Contrary to the bill’s intention, America will be less energy secure. Little environmental gain, big economic pain: Even the federal Government Accountability Office (GAO) warns that cap and trade legislation could make American companies less able to compete internationally and could drive American jobs overseas to countries that do not limit greenhouse gas emissions, thus driving up international emissions enough to offset or overwhelm U.S. cuts.9

1 U.S. Energy Information Administration, “Energy Market and Economic Impacts of H.R. 2454, the American Clean Energy and Security Act of 2009,” August 4, 2009. 2 API calculation based on U.S. Bureau of Economic Analysis data. 3 EIA (August 2009); CRA International (August 2009); Science Applications International Corporation, “Analysis of the WaxmanMarkey Bill ‘The American Clean Energy and Security Act of 2009’ (H.R. 2454) Using the National Energy Modeling System (NEMS/ACCF-NAM2),” prepared for the National Association of Manufacturers and the American Council for Capital Formation, August 12, 2009. 4 CRA International, “Impact on the Economy of the American Clean Energy and Security Act of 2009 (H.R. 2454),” prepared for the National Black Chamber of Commerce, August 2009. 5 The Heritage Foundation, “Son of Waxman-Markey: More Politics Makes for a More Costly Bill,” edmemo no. 2450, May 18, 2009. Revised and updated June 16, 2009. 6 API calculations based on U.S. Bureau of Labor Statistics state data and The Heritage Foundation estimate of job losses from “Impact of the Waxman-Markey’s Climate Change Legislation on the States,” webmemo #2585, August 19, 2009. 7 The Heritage Foundation, “Impact of the Waxman-Markey Climate Change Legislation on the States,” webmemo #2585, August 19, 2009. 8 EnSys Energy, “Waxman-Markey (H.R. 2454) Refining Sector Impact Assessment,” prepared for the API, August 21, 2009. 9 “Climate Change Trade Measures, Estimating Industry Effects,” U.S. GAO testimony before the Committee on Finance, U.S. Senate, July 8, 2009, pp5-6.

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The requirements are not equitable and will hurt consumers and producers of motor fuels most. The bill would allocate only 2.25 percent of allowances to fuel producers, but make them responsible for 44 percent of emissions. Refiners would need to cover emissions from refineries and also consumer emissions from planes, trains, autos, tractors, heating oil, and other petroleum use. In contrast, a few selected emitters will receive enough free allowances to roughly match their obligation. For example, utilities get more than 35 percent of all allowances. This inequitable system of allocations will hurt consumers and producers of gasoline, diesel fuel, heating oil, jet fuel, propane and crude oil.

The people of Illinois who use automobiles, trucks, planes, trains, heating oil and other non-transportation petroleum products are treated unfairly by the Waxman-Markey Climate Bill.

The transition to new low-emission energy sources will take time. Unlike power generation, which has the ability of switching to a low-carbon fuel source, there is no commercial-scale low-carbon source to fuel the nation’s 250 million cars.

We need an equitable plan that will address global climate change and improve, not weaken, our nation’s energy and economic security. Decisions made today will have repercussions for decades to come.

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Those states with the highest emissions per dollar of economic activity will face the greatest challenge to reduce them.

Metric Tons of Emissions per $1 Million in State Economic Activity I Least: 48 – 500 I Most: 501 –2305

Source: EPA, “Energy CO2 Emissions by State” (www.epa.gov/climatechange/emissions/state_energyco2inv.html) as interpreted by API.

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Emissions Ranked by State
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 State Total CO2 Emissions (2005 MMT CO2) 663.87 390.64 277.00 269.97 260.74 242.81 231.59 210.91 191.56 189.58 184.00 153.51 152.15 141.11 141.10 134.54 128.93 127.25 113.13 110.53 106.09 100.65 97.17 94.34 87.24 85.61 84.83 83.91 79.67 72.46 66.06 63.56 62.87 60.54 58.98 49.56 49.16 47.12 43.30 43.10 42.67 36.27 23.05 22.93 21.21 17.75 15.83 13.19 11.28 6.79 3.94 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 State Wyoming West Virginia North Dakota Montana Alaska Louisiana Kentucky Indiana Alabama Oklahoma New Mexico Mississippi Utah Iowa Arkansas Kansas Texas Missouri South Carolina Ohio Nebraska Pennsylvania Tennessee Wisconsin Maine Georgia Michigan Arizona Nevada North Carolina Colorado Illinois Minnesota Hawaii South Dakota Florida New Hampshire Virginia Maryland Idaho Washington Delaware New Jersey Oregon Vermont Massachusetts Rhode Island California Connecticut New York District of Columbia Total CO2/ $ Millions of GSP 2,305.47 2,132.54 2,015.01 1,213.64 1,198.64 1,138.84 1,082.90 970.74 930.69 873.24 856.37 781.89 727.66 701.63 697.84 686.34 670.95 653.09 623.05 612.27 609.85 566.44 555.15 510.94 509.83 505.73 503.88 448.76 445.12 442.86 435.68 433.57 429.12 426.69 426.56 387.26 385.23 366.37 340.77 335.57 320.28 314.20 312.11 295.73 294.29 260.29 257.62 240.82 223.50 220.18 48.21

Texas California Pennsylvania Ohio Florida Illinois Indiana New York Louisiana Michigan Georgia North Carolina Kentucky Missouri Alabama New Jersey Virginia Tennessee West Virginia Wisconsin Oklahoma Minnesota Arizona Colorado South Carolina Washington Massachusetts Maryland Iowa Kansas Utah Mississippi Wyoming Arkansas New Mexico Nevada North Dakota Alaska Connecticut Nebraska Oregon Montana Hawaii Maine New Hampshire Delaware Idaho South Dakota Rhode Island Vermont District of Columbia

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