California’s energy mandates amount to state-legislated energy poverty

Every Californian wants to conserve energy and see cleaner air and water in the Golden State.

But in their quest to safeguard the state’s environment for future generations, Sacramento policymakers have put in place an overzealous regulatory scheme that negatively impacts poor and minority communities.

The new Pacific Research Institute study, Legislating Energy Poverty, explores some of these costly burdens, unrealistic mandates, and giveaways to the wealthy.

In the most recent example, legislators just this summer voted to enact a 100 percent state renewable energy goal by 2045.  While this policy may sound good, it will significantly increase electricity costs for many Californians.  This is especially true in rural and inland parts of the state that are hotter and use more air conditioning than San Francisco, Malibu, San Diego, and coastal communities that have a much cooler climate.

As a result of these policies, monthly power bills in inland California are 57 percent higher on average during the summer months than in coastal communities.  With higher jobless rates, California’s inland communities can ill afford the higher energy costs imposed by these misguided state policies.

California has been pursuing expensive and unworkable renewable energy mandates for nearly a decade now.  This approach has contributed to the state having the highest average electricity prices among the lower 48 states.  You can expect that will worsen as the state goes “all in” toward meeting its 100 percent renewable energy goal.

Not only are policymakers imposing higher energy burdens on poor and minority communities, they are also using public dollars for giveaways to the rich – all in the name of energy-efficient cars.  For years, Sacramento has played car salesman through expensive, taxpayer and ratepayer-funded subsidies for higher-priced electric cars.  As I found in my research, only the wealthiest Californians are really benefiting from these programs.  79 percent of these electric subsidies are claimed by households making more than $100,000 per year.

At the same time, lawmakers have enacted low-carbon fuel standards that are followed by several other states, while imposing restrictions on oil and gas production.  These policies are increasing energy burdens for Californians, while taking away good-paying jobs and opportunity in the energy sector.

Californians now pay the nation’s second-highest gas prices thanks to this approach.  Making matters worse is the fact that Sacramento policymakers have imposed the nation’s second-highest gas taxes on drivers across the state.

Altogether, these well-intentioned policies are increasing the number of Californians who are living in “energy poverty,” which the Manhattan Institute defines as paying more than 10 percent of income for household energy costs.

This problem is even more troubling when you consider that roughly 20 percent of Californians live in poverty – the highest poverty rate for any state.

Advocates of the California approach claim that the state’s policies are the best way to reduce emissions.  But when you look at the numbers, California is not on top when it comes to cutting emissions.  In fact, states that aren’t known for their environmental leadership, like West Virginia and Ohio, have seen larger percentage declines in emissions than California.

What do these states have in common?  They both have embraced a market-based approach in setting environmental and energy policy.  It’s a win-win situation – reducing emissions without hurting the economy or adding to the economic burdens of their respective states’ poorest residents.

Sacramento should learn from these states.  If big government mandates aren’t particularly effective in cutting emissions, perhaps it’s time to rethink the state’s energy policy.  By embracing the free-market energy policies these other states have adopted, California can do a better job of cutting emissions.  Most importantly, the Golden State can chart a responsible and realistic environmental future – without negatively impacting the poor or sending away jobs.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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