If you think President Obama’s Twitter feed is a reliable source of scientific information, you’ll be comforted to hear that “[g]ood climate change policy and good economic policy can go hand in hand.” But if you look more closely, you’ll be alarmed to learn that “good economic policy” apparently includes big job losses and surging electricity bills.
It’s all part of the Obama administration’s #ActOnClimate initiative, introduced to “slow man-made global warming, ending a decades-long political stalemate [and] lowering the risk of ecological collapse.”
According to White House officials, global warming is so serious that it will even produce “climate refugees” fleeing higher temperatures in Alaska and other Arctic regions.
To solve the problem, President Obama’s Environmental Protection Agency (EPA) has introduced the Clean Power Plan (CPP) to cut carbon dioxide emissions from power plants. The president’s plan will let the EPA impose painful restrictions on states that rely on coal-fired power plants to produce low-cost energy—effectively punishing these states for using coal.
Why does that matter? Because despite the president’s trendy hashtags, these restrictions could prove catastrophic for working-class Americans. Coal-fired power plants provide jobs, meaning a “war on coal” is really a “war on workers.”
According to the Heritage Foundation, the new plan would result in a peak employment shortfall of one million jobs, with an average loss of nearly 300,000 jobs every single year. (Even the EPA has reluctantly admitted an average loss of almost 50,000 jobs per year from 2017 to 2030.)
All this would hit low-income communities the hardest. The National Black Chamber of Commerce (NBCC) found that carbon emission regulations—which includes the Clean Power Plan and other regulations—will cause job losses reaching seven million for African-Americans and 12 million for Hispanics. This job-killing government red tape will also boost poverty rates by more than 23 percent for African-Americans and 26 percent for Hispanics.
That’s not all. An Energy Ventures Analysis study found compliance costs for the EPA plan will be far higher than the government’s rosy projections for 2020 to 2030. This translates into more expensive energy: Estimates show the plan will increase U.S. electricity prices by 11 to 14 percent on average when implemented. In fact, every single state forced to implement CPP will see a jump in electricity prices. The NBCC study concluded that this comes out to $1 trillion in additional electricity costs by 2035, causing $2.3 trillion in lost economic growth over the next two decades alone.
Again, this especially hurts low-income households because they spend disproportionately on electricity. Nearly half of all American families—about 59 million households—claim after-tax incomes of less than $1,900 per month, while spending an average of 17 percent of their take-home pay on energy. A bigger electricity bill means even smaller paychecks. It’s no wonder the Heritage Foundation describes the EPA’s plan as a “tax that increases energy prices” which “disproportionately eat into the income of the poorest American families.”
And would it effectively combat climate change? Even the EPA doubts it.
The agency admits “the plan can have only a limited effect on global climate change.” One former EPA assistant secretary has even claimed the plan would, at best, reduce global temperature by 1/100th of a degree Celsius.
Are higher prices and fewer jobs worth 1/100th of a degree?
The Clean Power Plan produces no winners—not even the polar bears.
Scott Walter is president of the Capital Research Center in Washington, D.C.