The report “The Economic, Consumer Cost, and Pollution Impacts of Recent Federal Energy Policy Changes” published by Energy Innovation examines that the US’ energy policy framework has shifted dramatically during the second Trump administration and 119th Congress. The report uses the Energy Policy Simulator (EPS) to model federal policy decisions made since January 2025 to determine what the near future holds for families and businesses in terms of energy costs, public health, job losses, and grid reliability. The report further analyses effects of policy changes on energy prices, the economy, air pollution, and healthcare spending from 2026 to 2040.
The analysis focuses on seven key sets of policy changes: passage of the One Big Beautiful Bill Act (OBBBA), US environmental protection agency’s (EPA) reconsideration and repeal of Clean Air Act (CAA) §111 Greenhouse Gas (GHG) Standards, Mercury and Air Toxics Standards, and Clean Water Act Effluent Limitations Guidelines for electric power plants, US EPA’s repeal of the Endangerment Finding and federal tailpipe emissions standards, passage of CAA §177 Congressional Review Act resolutions overturning approvals for state-level tailpipe emissions standards , administration actions to limit renewable energy development, especially onshore and offshore wind plants, including limitations on issuance of new permits, US Department of Energy (DOE) cancellations of hydrogen hub funding and easing of 45V tax credit qualification for natural gas-based hydrogen, US EPA’s cancellation of the $7-billion Solar for All grant program.
The analysis highlights: households will pay an additional $650 billion for energy – an average of $460 per household in 2035 and $490 in 2040, cutting policies that drive innovation and efficiency in the transportation sector will inflate gasoline prices 14 percent in 2035 and 26 percent in 2040, atop near-term upward pressure from the Iran war and other market forces, OBBBA and reduced federal support for domestic manufacturing and innovation will cost the U.S. economy 820,000 jobs per year on average over the next decade, in addition to the 144,000 clean energy jobs lost within the past 18 months, slowing down electrification and domestic energy manufacturing will lower GDP in all years, totaling $2.3 trillion cumulative lost GDP, with effects flowing into other economic sectors with the economy losing $150 billion in GDP in 2030, peaking at a $250 billion net loss in 2032, then reverting to losses of $200 billion in 2035 and $120 billion in 2040, worsening local air pollution will raise healthcare costs by $43 billion, with annual increases of $4 billion in 2035 and $4.5 billion in 2040, contributing to rising household costs alongside rising energy prices and goods inflation.
Access the report here