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President Barack Obama extends his arm for a handshake as he tours the U.S. Steel Irvin Plant in West Mifflin, Penn., Jan. 29, 2014. (REUTERS/Larry Downing) President Barack Obama extends his arm for a handshake as he tours the U.S. Steel Irvin Plant in West Mifflin, Penn., Jan. 29, 2014. (REUTERS/Larry Downing)  

Senators say Obama’s climate policies will hurt the poor

If President Obama is serious about tackling income inequality, he should reconsider his plan to tackle global warming, 22 senators argue.

“The goal will nonetheless cost consumers in the form of increased prices for energy and anything made, grown, or transported using energy,” wrote Missouri Republican Sen. Roy Blunt along with 21 other senators to Obama.

“These new costs will result in less disposable income in families’ pockets. That means less money to spend on groceries, doctors’ visits, and education,” the senators wrote. “In short, low cost energy is critical to human health and welfare.”

The poorest Americans will be hit the hardest by Obama’s Climate Action Plan, the senators note, which aims to cut U.S. carbon dioxide emissions 80 percent by 2050. Obama’s climate plan would ban new coal-fired power plants unless they use costly, unproven carbon capture technology.

One study by the Brattle Group found that energy prices will increase up to $4 per megawatt hour for on-peak hours as coal plants are retired. Prices could be driven up by as much as 15 percent if natural gas-fired plants replace all of the retiring coal plants in the coming decade, forcing energy prices up to $11 per megawatt hour during peak hours.

The poorest households — those earning less than $30,000 a year — already spend 20 percent of their income on electricity. The senators argue that raising their power bills would be especially harmful to them since such costs can’t be easily offset by welfare, subsidies or other government benefits.

The coal industry provided 39 percent of the country’s electricity last year — making it the single largest power source in the country. Some areas of the country rely on coal for 80 percent of their power and federal regulators have expressed fears that U.S. residents will be “panicked” as coal plants shut down.

“I’ll be shocked that if a year from now, people aren’t getting almost panicked about the prospect of what the grid is gonna look like in the summer of ’15, and particularly in the summer of ’16, as we see this massive shutdown of coal plants, and looking at reserve margins and MISO at below 8 percent as a footprint,” said Philip Moeller, commissioner of the Federal Energy Regulatory Commission.

The senators also argue that favoring renewables over coal will harm U.S. competitiveness and make the country more like Europe, which faces high energy costs due to renewable energy policies and its cap-and-trade system.

“This should come as no surprise,” the senators wrote. “The fact is that going ‘all-in’ on renewables has significantly weakened the stability of many European Union (EU) countries’ electricity generation, caused prices to skyrocket, and has left ratepayers footing the exorbitant bill.”

“As an illustration, Germans will be paying more for electricity than any other major participant in the EU, according to the Household Energy Price Index for Europe. In September, Germans paid 40 cents per kilowatt hour (kWh) of electricity,” the letter reads. “Even the ratepayers in Connecticut, who suffer the highest electricity rates in the U.S. (17 cents per kWh), pay less than half that.”

Obama shows little sign that he will slow down on tackling global warming. In fact, he reaffirmed his commitment to tackling global warming in his State of the Union address on Tuesday night.

“The shift to a cleaner energy economy won’t happen overnight, and it will require tough choices along the way,” Obama said. “But the debate is settled. Climate change is a fact. And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”

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