Carbon Tax Devastating for Manufacturers

A study reported by the Pennsylvania Manufacturers’ Association says a carbon tax would have a devastating effect on the state’s manufacturers.

Manufacturing output in energy-intensive activities could drop by as much as 15 percent as a carbon tax increases prices of natural gas, electricity, gasoline and other energy commodities, according to the study conducted by NERA Economic Consulting.  The decline in less energy-intensive businesses could be more than seven percent, according to the study, Economic Outcomes of a U.S. Carbon Tax.

A carbon tax has been a popular proposal for combating global warming.

Key findings of the study include the following:

  • A carbon tax would deal a blow to employment in Pennsylvania with a loss of worker income equivalent to 77,000 to 81,000 jobs in 2013 and 96,000 to 122,000 by 2023.
  • The cost of using natural gas would increase by more than 40 percent in 2013, the first year of the carbon tax study, adding to household energy bills and increasing operation costs for many Pennsylvania businesses.
  • Gas prices at the pump would jump by more than 20 cents a gallon in 2013.
  • Households in Pennsylvania would see a significant increase in their electricity rates, with an average increase of 13 percent in 2013.
  • By 2023, the hardest hit economic sectors in Pennsylvania would be coal, which would lose between 48 and 54 percent in economic output, and energy-intensive manufacturing, which would lose 1.9 percent, and non-energy-intensive manufacturing, which would lose between .5 and .9 percent.

To view the Executive Summary of the study, please click here. To read the entire study, click here.