“Being Green” Means Subsidies for the Rich, Harm for the Poor

by David Bier on January 24, 2012

in Blog

Iain Murray and I have a piece in the Washington Examiner today explaining how green energy policies benefit the rich at the expense of the poor.

One thing we can expect in President Obama’s State of the Union speech is for him to echo his declaration from last month, “That’s the very simple choice that’s facing Congress right now. … Are you willing to fight as hard for middle-class families as you do for those who are most fortunate?” Yet when it comes to the environment, the president showers favors on the rich while punishing the poor….

Consider the Obama administration’s subsidies for electric vehicles. To start with, there is the $7,500 credit for the car itself. Add to that the recently expired $1,000 credit for installation of a 220-volt charger. And on top of these, the government has thrown more than $3 billion at the Chevrolet Volt alone — which totals out to $250,000 per vehicle. Not only do these credits go to corporate giants like General Motors, they subsidize cars for the wealthy.

The Volt sells for about $40,000, while the Fisker Karma sells for $100,000 — well above most Americans’ price range. That means that the federal government is again working to benefit the rich so they can drive cars that ease their environmental conscience. And for what? If 6 million wealthy Americans buy these cars, as the president hopes, it will reduce oil consumption nationwide by less than 1 percent.

OK, so Obama’s environmental policies are subsidizing the rich, but they’re helping the poor, too, right? Wrong. In fact, nearly every environmental policy hurts the poor the most. Last year, Americans spent more on gasoline as a percentage of their income than they have for 30 years. Yet that hasn’t stopped the president, cheered on by his environmentalist allies, from rejecting the Keystone XL oil pipeline or restricting offshore oil permits….

California’s RPS mandates that utilities use higher-cost renewable electricity, which acts like a hidden tax on electricity. This added cost forces prices upward, because electricity is a major component of every good or service. And the poor spend nearly all their income in a given year, so the RPS disproportionately hurts them.

Bryson understands hidden taxes, too. While speaking at the University of California at Berkley in 2010, Bryson praised President Obama’s cap-and-trade energy bill as having “the advantage politically of sort of hiding the fact that you have a tax, but that’s what you’re trying to do, trying to raise prices of carbon.”

Fortunately, cap and trade was defeated, but many other environmental policies — bans on cheap light bulbs, air emission regulations, and others — will continue to increase energy prices and harm the poor as long as they remain in effect.

The 1 percent devised these policies, but it’s the 99 percent who are paying.

Read the whole article here.

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