The Green Agenda Would Punish Lower-Income Households the Most, Environmentalists Admit By James Lynch
The costs of rapidly transitioning the world economy from natural gas to green energy sources over the coming decades will fall onto lower-income households the most, a reality that even proponents of many of those environmental policies now acknowledge.
The governor of the Bank of Italy, Fabio Panetta, acknowledged the potential negative impacts of a transition to “net-zero” carbon emissions while addressing an international energy conference on Monday.
“In fact, most climate change mitigation policies, such as carbon pricing, put pressure on the energy bills of businesses and households,” said Panetta, a former member of the European Central Bank governing council. “The consumption baskets of less affluent households are heavily weighted toward energy goods. They will therefore be disproportionately affected by the gradual increase in energy costs required for the transition.”
European and American consumers felt the burden of higher energy costs when oil prices spiked two years ago during the start of Russia’s war against Ukraine and inflation reached levels not seen since the 1970s. Inflation remains a top issue for American and European voters, as incumbent parties across Europe face difficult election prospects because of populist backlash.
“It is quite telling that a [former] member of the European Central Bank Governing Council who believes all of the fictitious asserted benefits of reducing carbon dioxide emissions feels compelled to warn just how expensive and devastating to consumers — and especially lower income consumers — carbon dioxide reductions will be,” said James Taylor, president of the Heartland Institute, a free-market think-tank.
“There is no hiding the fact that the climate agenda will substantially raise energy costs and have a devastating impact on household income,” Taylor said.
California, the progressive bastion of America’s environmental movement, plans on reducing greenhouse gas emissions by 2030 to 85 percent below 2022 levels, according to a report from the California Air Resources Board on its scoping plan for achieving carbon neutrality.
The report is the board’s most recent comprehensive update on California’s progress towards carbon neutrality by 2045. The California Air Resources Board oversees the state’s air pollution control and climate change efforts.
Under California’s scoping plan, total income for poor and middle-class households is expected to decline, while better off households are expected to benefit financially from the green transition.
“Total income for households that make less than $100,000 per year are estimated to decline by $5.3 billion dollars, while the total income for households that make more than $100,000 per year will increase by $5.3 billion under the Scoping Plan Scenario,” the report says.
The negative economic benefits of California’s plan are expected to hit minority households the hardest, because greater percentages of those households are in the less than $100,000 per year category. This finding contradicts activist talking points about “environmental justice,” a progressive vision for simultaneously shifting the economy away from fossil fuels and making up for the disproportionate effects of pollution and natural disasters across racial groups.
“[H]ouseholds in lower income groups are anticipated to see negative impacts, while households in higher income groups are anticipated to see positive impacts from the Scoping Plan Scenario in both 2035 and 2045,” the report explains.
“Because more than 60% of households in the race/ethnicity categories of Hispanic, Black alone, Native Hawaiian (HI) or Pacific Islander, American Indian or Alaskan Native, Other, and Two or More make less than $100,000 per year, these populations generally are likely to experience reduced income,” the report continues.
“White and Asian households will generally experience both increased and decreased income because these households are distributed more evenly across all four income groups,” it adds.
The Biden administration has made the green transition an important aspect of its policymaking process during President Joe Biden’s term. The administration often touts the various climate subsidies passed in 2022 along partisan lines as part of legislation misleadingly named the Inflation Reduction Act. Through subsidies and regulatory actions, the Biden administration has pushed an unpopular electric vehicle mandate and attempted to built out EV charger infrastructure to no avail.
Vice President Kamala Harris, the Democratic presidential nominee, previously expressed support for carbon taxes and an electric vehicle mandate. With Pennsylvania in play, Harris has come out against banning fracking, a popular position among progressive environmentalists, and her campaign says she does not support an electric vehicle mandate. But, her campaign’s choice to hire a seasoned climate activist suggests that Harris will still be receptive to the goals of the progressive environmental movement, including the green energy transition.
“The consumer always ends up paying for the various Progressive Lifestyle Choices that are pushed out by the alphabet soup of elites in our country and in Europe, either through higher prices, less effective products, or both,” said O.H. Skinner, executive director of the Alliance for Consumers.
“Rather than making life better for consumers, these entitled elites try and convince people that the pain they are feeling is good, or to be desired. It’s no wonder consumers are rebelling and pushing back on these efforts in ever greater ways,” Skinner said.
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