Penn State

Clean Power Plan could hurt low-income households, study finds

President Barack Obama’s Clean Power Plan could create an economic burden for some low-income households.
President Barack Obama’s Clean Power Plan could create an economic burden for some low-income households. AP

Smoking, science says, is bad for us. According to the CDC, smokers can expect to live at least a decade less than nonsmokers.

Most who light up know about the risks. But more than 40 million Americans still smoke. Psychological research says the pull of instant gratification often trumps our ability to reason for the long-term. Smoking may kill us, but it will take some time. Illogically, we emphasize the latter over the former: Such is the power of immediacy.

There’s been a wealth of research covering the effects of another creeping problem, a planet slowly retching of a silent fever. Climate change, President Barack Obama has said, is the most pressing problem for future generations both at home and abroad. His Clean Power Plan, announced last summer, has been his signature effort in reducing greenhouse gas emissions and in beginning to make good on the promises of last year’s Paris climate accord.

The latter, an almost decadelong effort, brought together representatives from 195 nations, which have made commitments to cut carbon emissions and reconvene every five years starting in 2023 to report their progress.

But the Clean Power Plan, which would cut power plant emissions by about a third by 2030 from 2005 levels, has been met with resistance. In September, litigation from 28 states and more than 100 companies challenged the EPA’s authority in implementing the program, which is expected to go before the Supreme Court next year. Pennsylvania is not part of the lawsuit, though Gov. Tom Wolf supports the plan.

Opponents say the program would stunt economic growth, besides being an overreach of executive power. Its implementation would result in the shuttering of hundreds of coal-fired power plants, and encourage states to invest in renewable energy sources such as solar and wind.

“It is one of the key components of our own mitigation strategy here in the U.S., and diplomatically, it’s really what allowed us to establish a historical agreement with China two years ago,” said Michael Mann, a professor of atmospheric sciences at Penn State.

Mann added in an email that the Paris agreement would reduce warming by about half of what it would be without it.

Despite this, the plan’s shortterm economic effects could be troubling, said Wayne Winegarden, a senior fellow in business and economics at the Pacific Research Institute.

“If we’re going to increase the cost of energy and reduce our use of fossil fuels, that comes with a cost,” he said.

It’s a cost, according to a recent PRI study, that would hurt low-income households the most. While the Southeast would be most affected, Winegarden said, the increase of the economic burden would be high in Pennsylvania, the fourth-largest coal-producing state in the nation in 2014, according to the U.S. Energy Information Administration.

The PRI study found Pennsylvanians could spend $1,567 a year on average for electricity under the Clean Power Plan, or a jump of about 0.6 percent of the median household income. In Centre County, a comparatively wealthy county in terms of median household income, the estimated impact could be as high as 3.08 percent. In the poorer Lane County, the burden leaps to more than a fifth of what families may bring in.

“It’s economically damaging,” Winegarden said. “Without any type of compensation, it’s particularly burdensome on lower income individuals, and when you’ve increased the cost of energy so much, what you’re going to end up doing is creating a steeper poverty trap for those families.”

Instead, Winegarden added, investing in innovation would be a better allocation of resources. He admitted climate change is a problem, but one that should be tackled differently from an economic standpoint.

But for now, the Clean Power Plan remains in limbo. And under the incoming administration, what will happen remains anyone’s guess.

“This is still a wildcard,” Mann said.

Roger Van Scyoc: 814-231-4698, @rogervanscy