California’s Democratic lieutenant governor said Friday that the state’s plan of obtaining half of its electricity from green energy by 2030 will distressingly impact the poor.
“There is a regressive nature to some of these things,” Lt. Gov. Gavin Newsom said at a conference on green energy Friday. “We have to be sensitive to issues relating to energy costs.”
Newsom also noted that at least one million households in California spend more than 10 percent of their income on energy. Most analysts agree that rising residential electricity prices are especially harmful to poor American households.
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“It’s nice to see that Lt. Gov. Newsom is waking up to the devastating effects that California’s climate policies are having on low income people, but he’s been asleep for a decade,” Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, told The Daily Caller News Foundation.
“High electric rates have destroyed jobs and are a huge burden for poor people,” she added. “California’s transportation policies force drivers to pay the highest gas prices in the 48 states, while lower income taxpayers subsidize $90,000 Teslas for Hollywood stars and Silicon Valley billionaires.”
Expensive power disproportionately affects poor families and other lower-income groups as the poor tend to spend a higher proportion of their incomes on “basic needs” like power, so any increase in price hits them the hardest. A 2009 study by the National Bureau of Economic Research found that the tax burden of green policies would affect the poorest households three times more than the richest households.
As electricity becomes more expensive, the cost of producing electricity-consuming goods and services also increases, effectively raising the price of almost everything. The higher prices are ultimately paid for by consumers, not industries.
Policies that raise the price of power to deal with global warming ultimately harm the world’s poor, according to a growing number of academics. The Intergovernmental Panel on Climate Change (IPCC) predicts that people in the year 2100 will be between three and 20 times wealthier than people of today, even when assuming the worst possible impacts of global warming. Reducing emissions today for the benefit of the population 80 years from now is transferring money from the poor to the rich.
Studies by academics and think tanks find environmentalist-inspired public policy likely increases unemployment, slows economic growth, and often leads to regulatory incentives that make the plight of ethnic minorities much worse. Spikes in the price of electricity harm black Americans and other ethnic minorities far more than they harm the average household, according to a study by the Pacific Research Institute (PRI).
President Barack Obama’s Clean Power Plan is estimated to raise the average annual electricity bill from 2.9 percent to 3.8 percent of average household income. Minorities tend to have lower-than-average household income and thus spend a far higher proportion of their money on electricity and energy. PRI found that the average black household in America will see its annual spending on electricity rise from 4.5 percent to 5.8 percent of income, thanks to the Clean Power Plan.
The average American’s electric bill has gone up 10 percent since January 2009, due in part to regulations imposed by Obama and state governments, even though the price of generating power has declined.
Extreme global warming of 2.5 degrees Celsius by 2100 is estimated by economists to reduce the average person’s buying power by a mere 1.3 percent — less than the average annual rate of economic growth. Thus existing environmental regulations already do more damage to the average person’s buying power than the worst-case global warming scenario.
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