California’s Carbon Restrictions Hurt Poor, Minorities

Published November 25, 2015

A new paper shows California’s policies to promote renewable energy and mandate restrictions on carbon dioxide emissions are having and will continue to have a disparate, harmful impact on the poor and minorities.

California has long been a leader in enacting progressive environmental policies. For instance, by the year 2020, the state has required one-third of the electricity delivered by utilities be generated from renewable sources. The state has also committed to reduce its greenhouse gas emissions by 40 percent below 1990 levels by 2030 and by 80 percent below 1990 levels by 2050. 

Plan Impacts Economy

Jonathan A. Lesser, in his paper, “Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents,” examines a number of California’s environmental policies and how they impact electricity prices at the county and household level. 

Lesser finds three significant economic results from the state’s renewable-energy mandates and carbon cap-and-trade program: Rising prices, a hidden regressive tax, and increasing energy poverty. 

California’s renewable-energy mandates and carbon cap-and-trade program have caused household electricity prices to rise, and Lesser estimates they will likely continue to rise at an even faster rate in coming years. 

According to Lesser, in 2012, nearly 1 million California households faced “energy poverty”—defined as energy expenditures exceeding 10 percent of household income. And in certain California counties, such as the inland and Central Valley regions, where summer electricity consumption is highest and household incomes are lowest, energy poverty tops 15 percent of all households. 

Renewables Are Not Viable

Bill Shughart, a senior fellow at the Independent Institute, agrees the costs of California’s energy policies amount to a regressive tax, and concerning renewable energy sources, he says, they are not yet ready for prime time. “The drawback to wind and solar is they require a back-up fossil fuel source,” Shughart said.

“At most, renewables generate only 5 percent of power nationwide, so we’re a long way off from them being viable,” Shughart said. “In fact, the only reason anyone uses them now is because of state subsidies, meaning consumers pay more for energy.” 

“And to the extent renewables raise energy prices, it’s like importing a regressive tax that disproportionately falls on poor people,” Shughart said. “Energy mandates mean people are spending a larger percentage of their household income on energy. This reduces personal income and private business investment in states where there are renewable mandates.”

In addition, Shughart points out, renewable energy supporters never talk about the other costs, especially to the environment. In particular Shughart points to the solar cells have a lot of toxic material in them so when they come to the end of their life, there are significant costs related to the disposal of these materials.

Shughart recommends nuclear as a better option than renewable for those concerned about the environment as the waste stream is relatively small by comparison and, ” 

“Nuclear is more reliable in its ability to generate power 24/7,” said Shughart. “

Kenneth Artz ([email protected]) writes from Dallas, TX.

Internet Info

Jonathan A. Lesser, “Less Carbon, Higher Prices: How California’s Climate Policies Affect Lower-Income Residents,” August 7, 2015: