The Clean Power Plan Harms the Poor and Middle Class
Acton Institute Powerblog

The Clean Power Plan Harms the Poor and Middle Class

“Just when I thought I was out, they pull me back in!” I’m no Michael Corleone, nor am I much of a businessman, but Al Pacino’s Godfather III quote came to mind this morning after reading an email I received from Ceres’ President Mindy Lubber. Ms. Lubber is quite happy with the Clean Power Plan, the Environmental Protection Agency and President Obama’s latest boondoggle to raise energy prices in the interest of saving Mother Earth.

It seems no matter how many gallons of ink spilled in protest of the religious left’s complicity with schemes that undoubtedly will reverse the past few decades’ gains in eradicating poverty throughout the world, I’m always pulled back in.

Ceres is a nonprofit group “advocating for sustainability leadership. We mobilize a powerful network of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.” Ceres’ Coalition members include As You Sow and the Interfaith Center on Corporate Responsibility as well as a plethora of other so-called faith-based investors. A quick look at the entire list of members reveals a veritable who’s who of leftist and progressive shareholder activists, lobbyists, unions and renewable-energy crony capitalists.

Here’s Ms. Lubber in her own words:

I was honored to be in the East Room of the White House representing Ceres and hundreds of companies and investors as President Obama and EPA Administrator Gina McCarthy announced the biggest step the U.S. has ever taken to tackle climate change – the Clean Power Plan. The plan is the nation’s first comprehensive effort to reduce carbon pollution from existing electric power plants – the single largest source of global warming pollution in the country.

The plan gives states flexibility to create their own mix of renewable energy, energy efficiency and clean energy to achieve the goal of reducing power plant carbon pollution by 32 percent by 2030.

Ceres has played a major role in mobilizing businesses and investors who are crucial to supporting implementation of the Clean Power Plan. Days before the final plan was announced, we organized 365 businesses and investors, including General Mills, Mars Inc., Nestle, Staples, Unilever and VF Corporation, to voice their support. They sent letters to more than two-dozen governors, urging them to finalize and implement their state’s plans to meet the standards and “expand clean energy solutions, attract new industries to the state, and create thousands of jobs.”

The companies and investors wrote, “Clean energy solutions are cost effective and innovative ways to drive investment and reduce greenhouse gas emissions. Increasingly, businesses rely on renewable energy and energy efficiency solutions to cut costs and improve corporation performance.”

The EPA’s Clean Power Plan will drive economic value for companies in all 50 states and could help save consumers up to $41 billion in electricity costs in the next 15 years. And its reach will go beyond the U.S. With the upcoming international climate negotiations in Paris later this year, America is showing leadership on climate change.

These 365 companies and investors, along with the 1,500 company signatories of our Climate Declaration, a call to action urging policymakers and business leaders to seize the economic opportunity in tackling climate change, are important voices in affirming the economic and environmental imperative to act.

I could not be more proud of our organization and the leadership from companies and investors in providing vital support for the Clean Power Plan and urging global leaders to protect our future and act on climate.

Oh, dear me. Has the world finally taken leave entirely of its senses? While dancing under the halo of Ceres’ perceived virtue, Lubber and the groups within her coalition actually are moshing the economically challenged into lives limited by energy poverty. Energy Poverty is defined as a household that spends 10 percent or more of its income on energy costs (excluding transportation expenses).

While vast amounts of public resources and money have been expended on renewable energy throughout the developed world, the result has been less than spectacular and often disastrous. Renewable mandates sent most of Spain’s industry packing to France, which derives more than 70 percent of its electricity from nuclear energy. Germany also surrendered to the reality of renewables, according to the Wall Street Journal last September:

The German shift to renewable power sources that started in 2000 has brought the green share of German electricity up to around 25%. But the rest of the energy mix has become more heavily concentrated on coal, which now accounts for some 45% of power generation and growing. Embarrassingly for such an eco-conscious country, Germany is on track to miss its carbon emissions reduction goal by 2020.

And this:

To top it off, Berlin has imposed a moratorium on fracking. By preventing exploitation of ample shale-gas reserves, the ban leaves Germany more exposed to strategic pressure from gas exporters (read: Russia) and raises the cost of gas relative to coal. This is another reason cheap, local coal is back in favor.

Ordinary Germans foot the bill for these market distortions, having ponied up an estimated €100 billion ($129 billion) extra on their electricity bills since 2000 to fund the renewable drive. The government estimates this revolution could cost a total of €1 trillion by 2040.

Berlin is scaling back some taxpayer subsidies for green power. But Germans still also pay for the energy revolution when job-creating investment goes to countries with lower power costs, as happened earlier this year when chemical company BASF said it would cut its investments in Germany to one-quarter of its global total from one-third, and when bad incentives skew generation toward dirtier coal instead of cleaner natural gas.

How has the renewable craze fared thus far in the United States? The Manhattan Institute recently issued a study on California’s renewable efforts. Authored by Robert Bryce and Jonathon Lesser, the two reported on their findings in the Orange County Register:

Indeed, the dirty secret of California’s headlong rush toward lower carbon-dioxide emissions and renewables is that the state’s wealthiest residents – who generally live in coastal areas where air-conditioning demand and, therefore, electricity use, is lowest – are shouldering less of the burden than Californians who live in inland locales that are hotter and generally poorer.

For example, in 2013, the average summer electric bill for a household in Hanford, an agricultural town in King’s County – located in the San Joaquin Valley and one of the poorest counties in the state – was over $500 per month. Meanwhile, in Mill Valley, located just north of San Francisco in wealthy Marin County, the average bill was just over $200. Thus, in Kings County, where the median household income is $48,133, residents are paying more than twice as much for electricity in the summer as are residents of Marin, even though the median household in Marin, according to the Census Bureau, has an annual income of $90,839, a level that is 89 percent higher than the median in Kings County.

In short, California’s renewable energy mandates and climate change policies may make wealthy coastal residents feel virtuous, but those policies are having a disproportionate economic impact on the poor.

It gets worse:

We also found that the highest rates of energy poverty are occurring in the most economically depressed areas of the state – the inland counties that largely depend on agriculture. For example, 15 percent of all Tulare County and Madera County households experienced energy poverty in 2012. So did 14 percent of all Imperial County households. By contrast, in the wealthy coastal counties and in Silicon Valley, energy poverty rates averaged between 3 and 4 percent.

Energy poverty is pervasive in the inland counties not only because they tend to be economically depressed, but also because the climate is less hospitable, with summer temperatures often exceeding 100 degrees. For lower-income households, that means big summer electric bills in order to keep cool, thanks to California’s tiered-rate system, which is designed to reduce electric consumption. For the largest residential electricity users, summer rates can be over 40 cents per kilowatt-hour.

Californians already pay some of the country’s highest electricity prices. But the full impact of the state’s renewable-energy mandates – which require one-third of the state’s electricity be produced from renewable sources by 2020 – has yet to be felt. Today, the state is getting about 20 percent of its electricity from renewables. Obtaining the remaining 13 percent will require increased reliance on wind and solar energy, which are more costly than conventional generation and will require billions of dollars in upgrades to transmission and distribution systems. upgrades.

California is further hurting the climate cause by shutting down its nuclear plants, facilities that have provided decades of power that was both baseload and low-carbon, the daily double of electricity generation.

How expensive will the renewable mandates be? A 2009 study by the California Public Utilities Commission estimated the state would have to spend about $115 billion on new infrastructure to meet the 33 percent-renewable goal by 2020. That amounts to about $2,900 for each Californian.

Concluding:

At a time when many liberals are expressing concern about inequality, California’s energy mandates provide a clear example of how misbegotten policy can exacerbate the chasm between the haves and the have nots. And for what?

Even if California obtained all of its electricity from renewable resources, required everyone to drive an electric car, and somehow reduced its greenhouse gas emissions to zero, it would have no discernable impact on the world’s – or the state’s – climate. Why? California’s emissions of roughly 350 million tons per year represent less than 6 percent of U.S. emissions (which totaled 6 billion tons in 2014) and about 1 percent of global emissions, which totaled 35.5 billion tons last year.

If liberals in California and elsewhere were truly interested in the fortunes of the poor and the struggles of the middle class, they’d be striving to make energy cheaper. Instead, the policies that they and their allies at Greenpeace, Sierra Club, and elsewhere are promoting – namely, that renewable energy, and only renewable energy, is acceptable regardless of the cost – are doing the exact opposite.

I would add the Ceres Coalition and the EPA to the list of culprits working against the best interests of the poor and middle class. Perhaps the religious, clergy, and nuns of AYS, ICCR, and other religious shareholder activists groups need to travel to Germany, Spain and California to witness what their desired renewable agenda has already wrought before it’s too late for the rest of the United States.

Bruce Edward Walker

has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. He was managing editor of The Heartland Institute's InfoTech & Telecom News from 2010-2012. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2011 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past five years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Flint, Mich., with his wife Katherine.