Green efforts that raise energy costs disproportionately hurt black people and poor people

Published September 16, 2020 4:38pm ET



“Black, Hispanic, and Native American households spend a much larger portion of their income on energy bills than non-Hispanic white households on average,” a new study finds.

And the differences aren’t small. For black households, energy’s share is nearly 50% higher than for white households.

Why is that? There are plenty of reasons, but mostly, it has to do with poverty.

African Americans, Hispanic Americans, and Native Americans tend to be poorer than whites, and as the new study by the American Council for an Energy-Efficient Economy points out, energy costs as a percentage of income are 3 times larger for low-income families than they are for the average family.

That’s largely basic economics. When your income is low, a greater portion of your income goes to necessities: food, health, housing, heat, and electricity. For rich people, even though their energy costs are higher in dollar amounts given larger houses, more gadgets, multiple cars, et cetera, energy takes up a smaller slice of their income since much of their money goes to services, savings, vacations, and expensive stuff.

ACEEE and the liberal environmentalist website Grist point out other reasons energy costs for the poor are higher proportionately: Low-cost housing is less likely to have good insulation and weatherization, and energy-saving appliances and systems are expensive.

So this ought to inform our debates about climate and pollution policies.

Most environmental regulations impose economic costs in exchange for purported environmental gain. Often, those costs fall on the consumer. Your stuff becomes more expensive, your energy bills go up, your taxes go up, etc. Think of a carbon tax. The point is to make it more expensive to consume natural gas, gasoline, and coal, which is most of what powers the average person’s life.

At Grist, the website reporting on the ACEEE study, writers regularly point out that we need to pay more for energy to fight the climate fight. “Are we willing to accept global warming in exchange for cheap energy?

Now, there are ways to transfer the higher costs away from the poor and onto society as a whole. The smartest involve efficiency. One of the cruelties of being poor is that it can be so darned expensive — poor people don’t have the capital to invest in things that will save them money in the long term. This applies to energy efficiency, too.

Better windows can pay for themselves with lower heating bills, but not if you can’t afford them upfront. Publicly funded weatherization for poor people will save poor people money, prevent energy waste, reduce pollution, and reduce greenhouse gas emissions.

Yet most environmentalist policies on the national level aim for moonshots, major climate programs that big business can sign on to because big guys shape the regulations and pocket the subsidies.

The Left doesn’t ignore the dynamic that simply increasing energy costs will punish the poor and minorities. They also sometimes perceive that bigger government historically is a home game for big business.

Hence the latest iteration of liberal environmentalism, the Green New Deal. A climate crisis, the logic goes, justifies a complete rewriting of society. You could see the logic of the Green New Deal this way:

1) We need to raise the cost of fossil fuels to make people use less.
2) This will fall disproportionately on poor people, so maybe we need to move away from the price system altogether.
3) In fact, to make our plan work, we need to rewrite society and the economy, which is great because we have some ideas about how things would run if we could restart at Year Zero.

In the end, you have some conservatives denying anything should be done, standard liberals teaming up with big business for inefficient handouts, and left-wing ideologues fighting for a new world that will rise up like the sun.

Meanwhile, poor people just want lower bills and some windows that will actually keep out the cold.