What If the US Was Forced to Pay EU Energy Prices
Bottom Line: Political candidates in the U.S. seeking to install EU-like energy policies must realize the drastic increase in prices that would result to hamper economic growth. This would involve strict government controls over both energy production and consumption. Like in the EU, the end result would be higher taxes, over regulation, and more imports. This creates a combination that surges pricing for just about every single form of energy – with measurable and devasting impacts for families and businesses.
There are a number of political candidates in the U.S. that are making explicit statements in support of the kind of government controls over energy production and consumption that exist today in the EU.
With high taxes, restrictive environmental policies, numerous generous subsidies for uneconomic alternative forms of energy, and a heavy reliance on imports, those in the EU pay much more than U.S. consumers for electricity, natural gas, motor fuel, and just about every other form of consumable energy.
For example, higher taxes on energy and CO2 emissions have been rapidly increasing EU over the past several years, ranging from between 1.6 to 2.4 times greater than U.S. prices per unit of energy consumed.
It obviously goes without saying that energy prices play a large part in the performance and competitiveness of the overall economy.
Thus, higher energy prices have a major negative impact on the economy – from lower GDP growth to fewer jobs and decreased household income.
On energy, the EU-path must be avoided at all costs.
Read the full study here.
Average Effective Tax Rates on Energy, and on CO2 From Energy (right)
Findings:
- U.S. political leaders pushing for EU-like energy policies must realize that this would drastically increase prices for families and businesses.
- European energy policies and prices would impose a $676 billion drag on the U.S. residential sector and a $31 billion hit to the industrial sector on an annual basis.
- The average American household would be forced to pay $4,800 more per year for their energy than they do today, eliminating the equivalent of 7.7 million jobs in the U.S.
- Annual lost labor income tied to the increase in residential energy prices would total $364 billion, in addition to a $17 billion loss on the industrial side.
Read the full study here.
