Sunday, January 29, 2017

Energy Efficiency Mandates Are Worse for Poor Americans Than Energy Taxes

When U.S. automakers met with President Donald Trump this week, they asked him to relax the vehicle fuel efficiency standards imposed by his predecessor. Just before Barack Obama left office, the Environmental Protection Agency issued a final determination that its Corporate Average Fuel Efficiency (CAFE) standard of requiring fleet-wide fuel efficiency of 50.8 miles per gallon on new cars by 2025 was achievable. "At every step in the process the analysis has shown that the greenhouse gas emissions standards for cars and light trucks remain affordable and effective through 2025, and will save American drivers billions of dollars at the pump while protecting our health and the environment," said outgoing EPA head Gina McCarthy.

Ratcheting up the mandatory energy efficiency standards for vehicles and appliances was a major part of Obama's effort to reduce greenhouse gas emissions. The Department of Energy calculated that the Obama administration's energy efficiency standards would save consumers more than $520 billion on electricity costs by 2030.

But not all consumers are alike. In a new study contrasting the effects on consumers of energy efficiency standards versus energy taxes, the Georgetown economist Arik Levinson notes that both energy efficiency standards and energy taxes function as a regressive tax, taking a larger percentage of a lower income and a smaller percentage of a higher income. His analysis aims to find out which is more regressive—in other words, which is worse for poor Americans.

http://reason.com/archives/2017/01/27/energy-efficiency-standards-are-worse-fo

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