Cap And Trade's Impact On Ind. Economy Uncertain

INDIANAPOLIS -- With the U.S. Senate now taking up the massive energy bill, many people are still confused by one of its major provisions, the cap and trade segment, which has produced massive publicity campaigns between the two sides.

The concept of cap and trade is simple, although its execution can get complicated. Industries would be allowed to emit a certain amount of greenhouse gases. Those who don't need their allotment could sell their excess to industries which need more. If they still ran over, they'd be hit with a carbon tax.

Democrats said Indiana could gain 38,000 green industry jobs from the provision. But Republicans warned that more than 35,000 jobs from old, energy-intensive industries such as steel making could be lost to other countries that don’t enact any caps.

Area economics professors told 6News' Norman Cox that the numbers could be way off, but both sides are right on the general concept.

"Some jobs go away, and some new jobs arise,” said Robert Harris, an economics professor at Indiana University Purdue University-Indianapolis. “We're going to see a change in the structure of the labor force, but we always have. That's also why we're not riding in buggies pulled by horses today."

The carbon tax would also impact electric bills in Indiana, where most power is generated by coal. Opponents said it will increase an average family's bill $754 a year. But economists said the impact would be far less.

"It seems incredible to me that it could increase prices by 50, 60 percent," said Butler University economics professor Robert Main. "Our experts say prices could rise 10 or 20 percent, more like $170 a year."

Cap and trade has already passed the House, but is just starting its way through the Senate, where there is more opposition.