WASHINGTON, Oct. 27, 2016 - Energy policies and regulations have led to much higher prices for energy in the European Union, according to a new report from the U.S. Chamber of Commerce’s Institute for 21st Century Energy.
If the U.S. decided to embrace the EU model, energy policies and prices would “impose a $676 billion drag on the U.S. residential sector,” the report finds, including an average increase in energy costs of $4,800 per year for American households and the elimination of 7.7 million jobs.
According to the report, key factors that drive up energy costs in the EU are:
- restrictions that inhibit access to low-cost, existing electricity supply and oil and natural gas supplies;
- “generous subsidies” provided by EU members for “uneconomic technologies”;
- policies that place a tax on carbon emissions; and
- higher taxes on energy consumption.
Due to these factors, EU energy prices per unit of energy consumed are currently 1.6 to 2.4 times greater than U.S. prices, the report finds.
“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,” says Karen Harbert, president and CEO of the Chamber’s 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 “leading candidates” were not named.
The report also provides analyses of seven states.
Following the EU model, Colorado, Illinois, Indiana, Michigan, Florida, Ohio and Wisconsin would all see gross domestic product (GDP) losses and decreased employment, the report finds.
Florida would see the highest number of job losses, an estimated 377,400. The state would also see the highest annual GDP reduction, at $28.5 billion.
Indiana households would get hit with the largest annual increases in energy prices – about $5,450 per household.
“Over the past few years, the growth in the U.S. economy has far exceeded Europe’s, fueled by affordable American energy,” says Harbert. “The American energy renaissance has led to resurgence in manufacturing, some of it at the expense of the European Union due to such high prices. The U.S. should do everything possible to retain our competitive advantage, not copy the EU’s failed approach.”
To read the full report, click here.
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