Critics, backers debate effects of climate bill on Va.

Virginia's economy will certainly be affected if Congress passes landmark legislation aimed at reducing greenhouse-gas emissions through major changes in the nation's energy policy.

But whether the changes could be good or bad depends on who is doing the research.

Critics yesterday charged that the American Clean Energy and Security Act would lead to higher energy prices and cost Virginia hundreds of thousands of jobs over the next 40 years. An environmental advocate, however, argued the legislation would have the opposite effect.

The legislation would mandate a 17 percent reduction in greenhouse-gas emissions by 2020 and an 83 percent reduction by 2050 from 2005 levels. The bill passed the House by a 219-212 vote in June and could be considered in the Senate next month.

The centerpiece of the legislation is the "cap-and-trade" system that would set overall limits on carbon dioxide and other heat-trapping gases released from power plants and other industries. It also aims to create a financial incentive for industries to reduce emissions by allocating permits to release specific amounts of greenhouse gases. Companies could sell permits if they reduce their emissions below what is allowed.

The Virginia Manufacturers Association and the Thomas Jefferson Institute for Public Policy, a Northern Virginia-based think tank, criticized the measure yesterday as essentially a massive tax on energy. The groups pointed to two studies -- one by The Heritage Foundation and another by The Beacon Hill Institute at Suffolk University in Massachusetts -- that argue the cap-and-trade plan would artificially inflate energy prices and drain business investment and consumers' disposable income.

"We packaged those two economic analyses because we thought it was important that leaders in Virginia understand the potential economic impact of the cap-and-trade legislation," said Michael Thompson, president of the Thomas Jefferson Institute.

The Beacon Hill Institute study argues that increased energy costs would cut disposable income in Virginia by about $7 billion by 2020 and more than $17 billion by 2050. As a result, the economy could shed 65,000 jobs by 2020 and more than 780,000 jobs by 2050, the study claims.

Advocates of the legislation argue it would save consumers money by improving energy efficiency and create jobs by putting about $150 billion into renewable-energy investments nationwide.

"Critics don't take into account the energy-efficiency measures and the investments in renewable energy in the bill," said J.R. Tolbert, an advocate with Environment Virginia, a group promoting the legislation. He pointed to a study by the University of Massachusetts and the Center for American Progress, which predicted Virginia would see an increase of about 45,000 jobs and $3.9 billion in investments in renewable energy resulting from the legislation.

The bill has drawn criticism from many manufacturers and energy producers, but some companies have backed it, among them DuPont Co., a major employer in the Richmond area. The company, whose business portfolio includes alternative-energy products such as materials for solar panels, called passage of the House bill "a good start" but said the legislation "could be improved upon in the Senate."

Contact John Reid Blackwell at (804) 775-8123 or .