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Going Green can Leave You in the Cold

e21 | 01/07/2014 |

With temperatures dropping down to -30 degrees in certain parts of the country, heating bills are on many peoples’ minds. U.S. energy policies such as biofuel mandates, fracking bans, the recently-expired wind energy tax credit, and slow drilling and pipeline approval processes all drive up the cost of electricity and natural gas.

This is bad news for consumers’ heating bills. According to the Energy Information Administration, 57 percent of U.S. households use natural gas to heat their homes. Nearly all other households use electricity. Additionally, two-thirds of electricity is generated by coal or natural gas.

Policies that make energy production more difficult have extensive regressive effects, meaning they disproportionately affect the poor. According to the Census Bureau’s Consumer Expenditure Survey, those in the lowest fifth of earners spend 11.6 percent of their incomes on electricity and natural gas. This is far more than the U.S. average of 3.6 percent, and the 1.5 percent spent by the top fifth. If gasoline spending is included, these percentages increase to 23.8 percent, 9.4 percent, and 4.0 percent, respectively. Increases in energy costs affect the prices of other consumer goods as well, amplifying the regressive effects.

While those who support using more green energy and less fossil fuels have good intentions, they often forget that increasing the price of energy has negative effects. Unfortunately, low-income earners feel the majority of these consequences—especially when it is this cold.

 


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