If the United States were to adopt the energy policies of the European Union (EU), it would impose a $676 billion drag on the U.S. residential sector and a $31 billion hit on the industrial sector annually, cost the average American household an additional $4,800 for energy every year, and eliminate the equivalent of nearly 8 million jobs, according to a report by the U.S. Chamber of Commerce's Institute for 21st Century Energy.
"As a result of the policies imposed by European governments, residents of EU member countries pay significantly higher prices than U.S. consumers for every type of energy they consume," according to the 53-page report, "What If The United States Was Forced to Pay EU Energy Prices?"
Lost labor income tied to increased residential energy prices would total $364 billion, in addition to a $17 billion loss on the industrial side, if EU policies were adopted in the United States, the Energy Institute said.
The Energy Institute identified four key factors that make energy more costly to consume and harder to produced in Europe relative to the United States:
Wholesale restrictions that inhibit access to low-cost, existing electricity supply and potentially abundant upstream oil and natural gas supplies;
More generous subsidies for otherwise uneconomic alternative technologies (the EU invest $750 billion on renewable energy 2005-2015, compared with $330 billion in the United States);
Policies that impose a tax or fee on carbon emissions; and
Much higher taxes on energy consumption.
"Saying that the U.S. should become more like Europe when it comes to energy policies has become a common refrain in some circles, so our report takes these politicians and interest groups at their word and presents the facts about what that would actually mean for our economy," said Karen Harbert, CEO of the Institute for 21st Century Energy. "The types of policies being advocated by leading candidates, such as restricting energy production and imposing new mandates, would drive up energy prices and reduce America's global competitiveness."
The report also provides state-level analyses of seven key states. Colorado, Illinois, Indiana, Michigan, Florida, Ohio, and Wisconsin would all see state gross domestic product (GDP) losses and less employment with EU energy prices. Florida would see the highest number of job losses (377,400) and annual GDP reduction ($28.5 billion), while Indiana households would see the biggest annual increases in energy prices ($5,450 per household).
The report is the third in a series by the Chamber's Institute for 21st Century Energy. The second report, which was issued last month, concluded that the economy would be "much weaker" if the energy renaissance had not occurred (see Daily GPI, Sept. 22). The first report, issued in August, found that the United States would lose billions in royalties and hundreds of thousands of jobs if policies inspired by "Keep it in the Ground" and other anti-fossil fuel movements lead to a ban on energy production from federal lands and waters (see Daily GPI, Aug. 24).