* Pre-emptive strike against any attempt to tax polluters
* Group warns that energy prices would rise, wages fall
* Some see carbon tax as solution to budget deficit
WASHINGTON, Feb 26 The largest U.S.
manufacturers' association on Tuesday warned that a potential
tax on carbon emissions to fight global warming would cut
factory output and could hurt the U.S. economy in other ways.
The National Association of Manufacturers (NAM) released a
report predicting such a tax would raise energy prices, squeeze
households and harm U.S. competitiveness. The association called
the report a preemptive strike against a recent proposal of a
carbon tax from two U.S. Senators who have not yet drafted any
NAM President Jay Timmons said the group wanted to show the
negative impacts of a carbon tax "early and often" so it "never
sees the light of day in Congress."
A carbon tax would charge emitters of greenhouse gases, such
as power plants and industrial facilities, for each ton of
carbon dioxide they emit. The goal would be to encourage a shift
to cleaner energy and therefore lower emissions.
Some green groups and Democratic lawmakers have championed a
carbon tax to curb carbon dioxide emissions blamed for warming
the planet, disrupting weather patterns and raising sea levels
by melting glaciers. A handful of former Republican policymakers
and some conservative think tanks have also touted its potential
to raise revenue for a cash-strapped federal budget.
"There is a lot of discussion on a potential carbon tax and
I think it's premature to think it is dead on arrival. Dead
ideas have a way of resurrecting themselves in different forms
(in Congress)," Timmons told reporters.
The NAM report said a tax of $20 per ton of carbon dioxide
emissions could cut energy-intensive manufacturing output by as
much as 15 percent by 2053, based on a study conducted by NERA
U.S. policy makers have viewed a potential tax on carbon as
a taboo subject in recent years. U.S. Treasury Secretary nominee
Jacob Lew said in written testimony to the Senate Finance
Committee that the White House has no plans to propose a carbon
tax. Lew was confirmed by the panel on Tuesday.
But this month, Senators Barbara Boxer, Democrat of
California and independent Bernie Sanders of Vermont, two of
Congress' most liberal lawmakers, proposed a bill to tax carbon
emissions. They said such a tax would raise up to $1.2 trillion
in federal revenue over 10 years.
The carbon tax concept was also discussed in November during
discussions on avoiding the so-called "fiscal cliff" of
automatic tax rising and spending cuts.
The Congressional Research Service, in a 2012 report, said a
$20 per ton tax on carbon emissions could halve the U.S. budget
deficit over time.
But Tuesday's NAM report said that any revenue raised from
the carbon tax would be significantly outweighed by the negative
effects on the economy.
Opponents say a carbon tax would dampen manufacturing
productivity and also have a negative impact on output as energy
costs would rise and send a ripple effect through supply chains.
"Higher production costs and reduction in output would
ripple through the rest of the economy, reducing household
incomes and consumption," said Anne Smith, senior vice president
The report also projected that a carbon tax would lead to
lower real wage rates because companies, facing higher costs,
would cut workers' incomes to compensate.
Imposing a tax would also result in a loss of worker income
"equivalent to between 1.3 million and 1.5 million jobs in 2013
and between 3.8 million and 21 million by 2053," the report
In addition to cutting greenhouse gas emissions and reducing
the risk of escalating costs from more severe weather disasters,
the legislation proposed by Sanders and Boxer would help
American manufacturers and create jobs.
Senator Sanders on Tuesday hit back at the findings of the
NAM-sponsored report, and said the cost of not responding to
climate change would escalate costs to taxpayers, homeowners and
businesses as natural disasters become more frequent.
Sanders said his bill protects manufacturers by calling for
$75 billion to be invested over 10 years to help manufacturers
invest in energy efficiency and make them more competitive.It
also would invest $10 billion over 10 years for job-training
programs for workers in new energy technologies.
(Reporting By Valerie Volcovici; Editing by David Gregorio)