Memo on H.R. 2454: Competitiveness

Nicholas Institute Discussion Memo on H.R. 2454, American Clean Energy and Security Act of 2009

Author(s): Nicole St. Clair Knobloch

Published: August 2009

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Cap-and-trade has inspired fears about industrial “competitiveness” losses, usually meaning loss of jobs and production/domestic employment, and shift of emissions, to foreign shores that do not have a cap. Recent analyses of which industries would be most affected suggest both relatively small direct effects on U.S. competitiveness, and a limited ability to control all losses because of changed consumer behavior as countries enact carbon caps. The analyses do however suggest policy designs to avoid some competitive effects – particularly those specifically attributable to higher energy prices from cap-and-trade.