Climate change is an issue that has become increasingly prominent in discussions regarding the long term environmental and energy policies of Michigan and the United States. While the Chamber supports efforts to increase America’s energy independence and accelerate the development of clean domestic energy sources in Michigan, we oppose any climate change legislation that would drive American jobs overseas, particularly in the manufacturing sector, while not taking into account the rise in emissions in other nations.
On May 14th, Senators John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) introduced a climate change bill known as the American Power Act. Although supporters claim otherwise, the American Power Act follows the framework set forth in the cap and trade bill (Waxman-Markey) that passed in the United States House of Representatives on June 26, 2009. Both bills establish a framework to lower emissions over a period of time by setting a cap on emissions and providing for a trading system for emissions permits. The American Power Act also imposes broad new regulations on industrial, transportation, and energy infrastructure.
The problem with these aggressive emissions cuts is that they are being made independent of any equivalent commitment from nations such as Brazil, India, or China. These countries and others are increasing their own emissions at a staggering pace – China has already overtaken the United States as the number one global emitter of greenhouse gases. The legislation’s unilateral tightening of our standards will drive more manufacturing overseas and emissions will subsequently “leak” to regions that have scant environmental protection and a heavy reliance on power sources that are harmful to the environment.
This leakage will further decimate manufacturing in Michigan and the United States. A study by the National Association of Manufacturing estimates that by 2030 fuel prices in Michigan will have increased by 26 percent, electricity prices will have increased by 60 percent, and natural gas prices will have increased by 80 percent if the American Power Act or other similar cap and trade regime is passed. The increase in energy prices will result in a $1,100 average reduction of disposable income per household in 2030. NAM also estimated that Michigan will lose as many as 90,000 jobs as a result of such a cap and trade bill.
The American Council for Capital Formation estimates that overall manufacturing output in Michigan could decline up to 6 percent with transportation manufacturing declining by 9 percent in 2030 as a result of a cap and trade bill. These losses would result in a $12 billion decline in Michigan’s gross state product. Overall, the unemployment rate in Michigan would surely rise as a result of the decline in manufacturing output.
The Muskegon Area Chamber of Commerce is steadfast in our commitment to support the growth of local businesses and the manufacturing sector within Michigan. The passage of cap and trade legislation would result in further decline of the Michigan manufacturing sector and increase the financial burden on families due to the rise in energy costs.
While employment in the manufacturing sector has fallen over 33 percent in the past decade, the sector is still a vital pillar of our state’s economy. We acknowledge the serious nature of climate change, but we do not support any legislative action that ignores the global nature of climate change.
