Instituting energy policies similar to the European Union’s would cost the average U.S. family $5,000 per year in increased energy prices, according to a report from the U.S. Chamber of Commerce.
Released Friday, the report examines the effect of instituting EU policies on the United States, as many Democratic politicians have promoted. The policies include reducing fossil-fuel powered power plants, providing more subsidies for renewable energy, taxing carbon emissions and placing higher taxes on energy consumption.
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Instituting such policies would mean a $676 billion hit to the residential sector and a $31 billion hit to the industrial sector every year. The average household would spend about $4,800 more on energy each year, according to the report.
“Taken together, these four factors have held the European economy back and given the United States (and other low-cost energy countries) a major advantage in the global marketplace,” the report stated.
The report argues that many Democratic politicians, led by Vermont Sen. Bernie Sanders in his presidential campaign, have praised Europe’s energy policies, particularly Europe’s restrictions on fossil fuel use because the politicians believe these policies will limit the effects of climate change. Many scientists believe the burning of fossil fuels is driving climate change and the subsequent warming of the globe.
The European Union made ambitious commitments to the Paris Agreement, the world’s first climate change agreement reachd last year in the French capital. The continent promised a 40 percent cut in carbon emissions from 1990 levels by 2030. The EU is also mandating that 27 percent of its energy must come from renewable sources by 2030.
By comparison, the United States committed to cutting between 26 and 28 percent of its carbon emissions below 2005 levels by 2030. The report points out that Democratic presidential nominee Hillary Clinton wants to make half of the country’s energy come from renewable sources by 2030, which is even more ambitious than Europe’s targets.
However, the chamber’s Institute for 21st Century Energy said the European Union has much higher taxes, much more restrictive environmental policies and a much greater reliance on imported energy than the United States. That causes Europeans to pay much more for energy than U.S. consumers.
According to the report, following the European Union’s energy policies could severely harm the economies of some states. The gross domestic product of Florida would drop by $28.5 billion, Illinois would see its GDP fall $17.4 billion and Ohio would lose almost $15 billion.
“We estimate that each of these states would lose billions of dollars in state GDP and labor income, and hemorrhage tens of thousands of jobs,” the report stated.
According to the report, European policies toward energy should not be a goal for U.S. politicians. Instead, they should be seen as a “cautionary tale.”
“Europe provides a cautionary tale. Regulatory structures — including the Emissions Trading System, taxes, user fees, large subsidies and mandates — all conspire to make Europe’s energy prices among the highest in the world,” the report stated. “Exorbitant energy prices are turning Europe’s energy-intensive industries into endangered species, and they would do the same thing here if given the chance.”
