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NAM/ACCF Forecasts 20 Million New Jobs Under American Clean Energy And Security Act

By Brad Johnson on Aug 12, 2009 at 2:05 pm

A new analysis of the economic impact of clean energy legislation forecasts powerful job and economic growth through 2030. The analysis of the Waxman-Markey American Clean Energy and Security Act (ACES), commissioned by the right-wing National Association of Manufacturers and the American Council for Capital Formation (ACCF), finds that 20 million new jobs will be created in the United States by 2030, even under high-cost assumptions:

NAM ACES Job Chart

Similarly, NAM found the gross domestic product of the United States would increase by $9 trillion by 2030 from current levels. To be more precise, the analysis estimates $9.1 trillion in growth under its low-cost scenario, and $8.9 trillion under its high-cost scenario, versus $9.5 trillion in growth under its baseline scenario.

This analysis, conducted by the Science Applications International Corporation (SAIC), uses the same economic model as the U.S. Energy Information Administration (EIA), but with “input assumptions provided by ACCF/NAM”:

SAIC is a policy-neutral organization. SAIC executed the NEMS/ACCF-NAM 2 model in this project using SAIC’s and ACCF/NAM’s interpretation of the bill, and input assumptions provided by ACCF/NAM. The modeling was performed independent of EIA. Analysis provided in this report is based on the output from the NEMS/ACCF-NAM 2 model as a result of the ACCF/NAM input assumptions. The input assumptions, opinions and recommendations in this report are those of ACCF and NAM, and do not necessarily represent the views of SAIC.

These “input assumptions” for the deployment of the ACES carbon cap-and-trade market include:

– International offsets are limited to 5%. ACES allows 50% of offset use to come from international offsets.

– Wind energy deployment limited to 5 to 10 GW per year for the next twenty years. In reality, 8.5 GW in new American wind power was deployed in 2008, even without the incentive of a carbon market.

NAM also made unusually pessimistic assumptions for the deployment of biomass electricity generation and the use of banking provisions by polluting corporations. These assumptions lead to a carbon allowance price of $123 to $159 per ton of carbon dioxide in 2030. This price is more than twice as expensive as the estimates of the EIA, the U.S. Environmental Protection Agency, and the Congressional Budget Office.

Essentially, NAM is assuming that American companies will be unable to deploy clean energy and energy efficiency technologies in a timely fashion. It’s odd that the National Association of Manufacturers is so gloomy about its members’ ability to build the clean energy economy. Even so, its analysis finds vibrant economic growth while global warming pollution is kept under control.

Update

At Get Energy Smart Now, A. Siegel notes:

Yet again, the SAIC team has stepped away from taking responsibility from this work: “Don’t blame us, we just ran the model, we take no responsibility for what went in and what comes out.” In modeling, one of the standard abbreviations: GIGO: Garbage In, Garbage Out. . . . For example, there is no valuing of improved health due to reduced fossil fuel pollution. There is zero valuing of how improved health of workers means lower absenteeism and therefore higher productivity. There is zero valuing of reducing the risks and impacts of catastrophic climate change.


Update

The Media Matters Action Network asks about SAIC: “Would A ‘Policy-Neutral’ Organization Spend $20 Million On Lobbyists?”

Tech Industry Giants Plan ‘Lobbying Blitz’ To Save Offshore Tax Deferral

By Pat Garofalo on Aug 12, 2009 at 10:55 am

ap080513014342National Journal reported today that some tech-industry giants are getting ready to “intensify their opposition” to the Obama administration’s plan to limit the use of offshore tax deferrals:

High-tech industry giants such as Hewlett-Packard, IBM, Microsoft and Oracle will intensify their opposition this fall to an Obama administration proposal aimed at limiting what critics insist are offshore tax breaks…[T]he high-tech sector is fighting back with a lobbying blitz aimed at positioning the deferral as a necessary mechanism that enables U.S. companies to remain competitive in foreign markets — and not as a tax break.

NJ reports that “while proposals to limit tax deferrals and other international tax law changes have yet to find their way into legislation, the tech sector isn’t taking any chances.” “Threats persist,” said Bartlett Cleland, senior director of tax and e-health policy for TechAmerica. The Business Roundtable has also promised to “spend whatever it takes” to preserve the status quo.

As usual, these companies are leaving out the convenient fact that they use a variety of tax havens and loopholes to pay far below the statutory corporate tax rate of 35 percent. For instance, Hewlett Packard (HP), which kept $5.2 billion in earnings overseas in 2008, lowered its effective tax rate by 16.9 points last year. And HP was not even close to the most effective at this, as General Electric managed to drive its rate all the way down to 5.5 percent last year.

The Obama administration’s proposal to deal with this problem is fairly benign, saying only that companies choosing to keep their profits offshore “must also defer taking their deductions until their overseas profits are brought back to the country.” It seems only fair that companies keeping their profits offshore be prevented from claiming deductions on those earnings. The administration also wants fix a tax rule known “check the box,” which was meant to simplify classification of corporate subsidiaries, but unintentionally created a tax loophole.

According to a report from the U.S. PIRG Education Fund, a $100 billion annual tax burden is shifted to US-based individuals and companies, thanks in part to corporations stowing their profits offshore. Research has also shown that corporations allowed to defer taxation on offshore profits will leave that money offshore regardless of their home nation’s tax rate. These two measures proposed by the administration, meanwhile, will raise an estimated $146.6 billion over ten years, while putting some small sense of fairness back into the corporate tax code.

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