Increasing oil prices could threaten the country’s economic recovery and limit progress on energy-efficiency policies, according to a new report issued by the Joint Economic Committee (JEC) today on the eve of Earth Day’s 40th anniversary.
The report, titled “Rising Oil Prices: A Potential Threat to Economic Recovery and Energy-Efficiency Policies,” shows that the United States, which has made little progress towards reducing its dependence on oil for transportation, remains vulnerable to oil price spikes. The share of U.S. Gross Domestic Product (GDP) going to oil expenditures has more than doubled from 1.8 percent in 1993 to 3.8 percent today and is close to the 4 percent level – a level often associated with recessions. The reliance on oil to meet the country’s transportation needs also harms the environment: the transportation sector has been the largest producer of carbon dioxide since 1999, producing almost one-third of total CO2 emissions in the United States.
