Seeking a Climate Change Solution That Doesn't Forget the Poor

Is aid or greater efficiency the answer for those in need?

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The 25-year-old Center on Budget and Policy Priorities, often viewed as the voice of the poor in Washington, has launched a project on climate change. If the government makes gasoline, heating oil, and coal power more expensive in order to cut fossil fuel emissions, how will that affect the people already suffering because of high energy prices? CBPP estimates that achieving even a relatively modest 15 percent emissions reduction would raise energy costs for the poorest fifth of U.S. households by $750 to $950 a year. CBPP advocates using just a small fraction, 14 percent, of the $50 billion to $300 billion in revenue from industry that Uncle Sam could generate through a greenhouse gas reduction program to offset the increased costs for the poor. Possible offsets include an increase in the earned income tax credit and "climate change rebates" that could be distributed through state assistance programs. I italicized "could generate" because it's not at all clear that lawmakers will design a program that raises this much revenue. Either they'd have to auction off right-to-pollute allowances or institute an outright tax. It's quite possible we'll go the way of the Europeans and simply give the right-to-pollute allowances away to industry.

Joseph Romm, a senior fellow at the Center for American Progress, former Clinton administration energy official, and author of the book The Hype About Hydrogen, comments on the CBPP's climate project at his Climate Progress blog. He argues that a central strategy for fighting the impact of higher energy prices on low-income consumers has to be an aggressive energy efficiency policy to keep their bills from rising as much as the CBPP predicts.