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Indiana manufacturing jobs ‘most vulnerable’ to cap-and-trade bill, analysis finds

WASHINGTON, DC — Global warming legislation that mandates a huge reduction in carbon dioxide emissions would hit Indiana’s economy harder than any other state, according to an analysis by The Heritage Foundation.

The Waxman-Markey bill currently under consideration in Congress seeks to cut emissions from fossil fuels by 83 percent. To do so, it would create a cap-and-trade system that would raise energy prices dramatically. The nonpartisan Congressional Budget Office estimates the bill would cost the typical American household an extra $1,600 annually within a decade.

Indiana emerged as the state most at risk from cap-and-trade. Its large manufacturing sector accounts for nearly 20 percent of all employment.

Indiana emerged as the state most at risk from cap-and-trade. Its large manufacturing sector accounts for nearly 20 percent of all employment.

But energy-intensive businesses – such as manufacturers – would pay a far greater price. And those manufacturers most dependent on coal-generated power would be the most severely crippled.

To determine which areas of the country would be hit hardest, Heritage researchers devised a simple “Manufacturing Vulnerability Index” that reflects both the degree to which regional employment is concentrated in manufacturing and the degree to which it is dependent on coal-generated energy. The greater a region’s reliance on manufacturing and coal, the more vulnerable it would be to severe job loss resulting from the proposed $1.9 trillion cap-and-trade plan.

Indiana emerged as the state most at risk from cap-and-trade. Its large manufacturing sector – more than 600,000 jobs accounting for nearly 20 percent of all employment – combined with a heavy reliance on coal (94 percent of all energy) put it at the top of the national Manufacturing Vulnerability Index. Its MVI rating was 28 percent higher than runner-up Ohio and more than three-and-a-half times that of the median rating.

Five of the 10 most vulnerable congressional districts are located in Indiana as well. The 3rd District (represented by Mark Souder-R), topped the national rankings, followed closely by the 2nd District (Joe Donnelly-D). Indiana’s 6th (Mike Pence-R) and 9th (Baron Hill-D) districts finished in the fifth and sixth spots, respectively, and the 8th District (Brad Elsworth-10) ranked tenth.

“The best that can be said of cap-and-trade regimes is that they spread the pain in a bi-partisan fashion,” said Heritage energy economist David Kreutzer. “But they don’t spread it evenly. Indiana will pay a much higher price, in terms of lost jobs and higher energy costs, than the rest of the country if Congress adopts this approach to environmental improvement.”

Heritage expects to complete a more detailed economic analysis of the Waxman-Markey bill within a week. And Kreutzer predicts the job loss numbers “won’t be pretty.”

A Heritage analysis of last year’s Lieberman-Warner cap-and-trade bill estimated it would lead to nearly 3 million manufacturing jobs lost by the year 2029. And, Kreutzer noted, that bill was far less stringent than Waxman-Markey.

“The CO2 reductions envisioned in Lieberman-Warner would have destroyed more than half the jobs in some manufacturing sub-sectors like machinery manufacturing and those that make plastic and rubber products,” Kreutzer noted. “Under this year’s bill, things would only get worse.”

The Heritage Foundation is a non-partisan think tank based in Washington, DC.

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2 Responses to “Indiana manufacturing jobs ‘most vulnerable’ to cap-and-trade bill, analysis finds”

  1. Frank Arnold says:

    Heritage Foundation non-partisan?! The authors of this piece clearly did not do their homework. The Heritage Foundation is a conservative, if not right-wing, think tank. Debate the merits or drawbacks of their positions as you will, but the Heritage Foundation is no more non-partisan than professional wrestling is real.

    That being said … the Heritage Foundation is recycling the same old garbage about jobs vs environment as if improving one automatically means harming the other. Indiana’s environmental rankings are among the worst in the nation, and it has a great deal of room for improvement. I, for one, would be glad to see cap-and-trade implemented and enforced so this state can clean up its act. We’ll all both figuratively and literally breathe easier if it comes to pass.