Status Quo Energy Policy is Failing Low-Income Americans

One of the many reasons why the Lieberman-Warner (and Boxer substitute) bill dropped dead on the Senate floor was costs — costs to the economy and costs to households already burdened by rising food and record-high gas prices. A post-mortem in Time observed the floor’s action was rampant with “economic fear mongering.

The Time article (which Joe blogged on earlier) goes into more detail about how delay tactics and the Republican messaging on economic costs dominated the bill’s presence. Simple messages are always more successful than complex messages, and while the overall message (slow global warming) is pretty clear, good legislation will be indescribably complicated (the devil is in the details).

How to deal with global warming and high energy costs is a question that will not go away. What leaked out of the Senate last week demonstrated that, as does an on-going debate in Britain (on how to address ‘fuel poverty’).

The issue of energy costs to Americans is dear to many of us advocating global warming legislation, despite our also seeing the urgent need to reduce greenhouse gas emissions. Concern for low- and middle-income Americans is not exclusive of science-based climate policy.

That is why the Center for American Progress has advocated that 100 percent of the allowances in a cap and trade scheme be auctioned so that rebates can be given back to Americans most burdened by high energy costs. That is also why Obama’s climate plan and the iCAP (Investing in Climate Action and Protection) legislation introduced by Rep. Ed Markey also support a full auction.

Before any rant on the high costs of global warming legislation is given an ounce of credibility, look at what’s already happening with simply stupid energy policy:

ONE – A report released yesterday by the National Energy Assistance Director’s Association surveyed the impact of high energy costs on Americans of all income brackets, and of course found low- and moderate-income Americans most squeezed.

TWO – Our trade deficit is in the dumps. In the past year, it has skyrocketed, driven by none other than crude oil imports.

THREE – $4. The national average price of a gallon of gas – need I say more?

And finally, must we reiterate that the costs of inaction (see above two points, for example) are far more expensive and detrimental than the costs of action?! (See Stern, IPCC, NRDC)

Energy policy is economic policy, and voices on both sides of the aisle are right that we need better of both. And, yes, we need to be protecting the most vulnerable Americans, but the status quo is NOT doing that, and no one can claim it is. But done well, I think global warming legislation is a step in the desired direction, not a setback.

— Kari Manlove

7 Responses to Status Quo Energy Policy is Failing Low-Income Americans

  1. Earl Killian says:

    The time to have taken action to bring down fuel prices was the early 1990s, when we should have raised CAFE standards. Now the only thing we can do is hand out cash to make up for lousy vehicle efficiency; cash that partially negates further efficiency.

    Any real declining cap will cause most existing power plants to close down and go bankrupt (that is the point, after all). The investors are not going to just roll over; they are going to fight this. The idea of cap-grandfather-trade is that they at least get revenue from selling their allowances to partially make up from their lack of revenue from their shuttered power plant. In that sense cap-grandfather-trade is much more politically likely than cap-auction-rebate; it is a bone to throw to the investors. We’ve already shown that we will bail out investors whenever there is big trouble in the US (but not ordinary people). I suspect this issue will be no different. Another approach would be to nationalize the fossil plants so as to be able to shut them down.

    $4/gallon? That is so end of May. In California in mid June the price is approaching $5 for premium ($4.93 yesterday). I am glad I have an electric car; fueling an EV is like buying gasoline at $0.75 a gallon.

  2. paulm says:

    bush tried to ensure cheap american oil ~ he has sold the sole of america.

  3. JCH says:

    The time was the 1970s. The country was led out of the post-Carter era by a bunch of spoiled-rotten people. Milton Friedman should be in a jail cell. I was in business school at the time and was forced to go listen to that ignoramus spoon feed a fairy tale to an entire generation. The energy situation at the time was sufficiently understood; including GHGs. Dealing with it required a national energy policy: big government. Oh the horror of it.

    The idiots in the nation rejected it. Now we are spread out and linked by useless strips of concrete: fabulous ribbons of freeways and platforms for what is son to be a gigantic fleet of parked airplanes. No trains; no densely built cities; nothing.

  4. Robert says:

    I just can’t get my head round this problem with $4/gallan gas. Yesterday I paid 118.9 pence a litre at my local (UK) filling station. It now costs me around £80 (about $160) to fill up one of our two Toyota Previa 2.4 litre petrol engined cars (UK).

    The world didn’t end. I havn’t gone bankrupt. Its just a bit more expensive than usual, that’s all.

    The real problem is that crude has been doubling in price every 18 months for the last 10 years. This will continue until the global market has reached some sort of equilibrium. Consuming countries that have not learned to value oil will be the big losers and will be placed on a crash diet, headed I think by the US.

  5. David B. Benson says:

    Robert — Might reach an equilibrium in Pounds or Euros. Won’t in US dollars. Dollar will just go on losing value and losing value. :-(

  6. David B. Benson says:

    We’re saved. Halaluha, saved!

    Bugs to the rescue. :-)

  7. Peter Wood says:

    The Australian Government has introduced an independent review on climate policy by Professor Ross Garnaut, who has advocated most of the permits being auctioned, with a significant portion of the money being raised returned to low and middle income households. This could lead to a net transfer of money from greenhouse intensive industries to households. There could be a significant political impact from this, with households having a financial interest in stronger mitigation policies.