Carbon-Income Inequality

Obama's new energy rule is a huge tax on the poor and middle class.

WSJ editorial. Excerpts:

"The EPA's goal is to cut carbon emissions by 30% by 2030 from near-peak 2005 levels, which will inevitably raise the price of electricity and thus all other goods down the energy chain. The 645-page rule is targeted at the 1,000 or so U.S. fossil fuel power plants, but it more or less orders states to adopt cap and trade or a carbon tax. 

A Democratic Congress debated and rejected this anticarbon program in 2010, and there isn't a chance it could get 50 Senate votes now. But no matter, the EPA claims the authority for this sweeping power grab by pointing to an obscure clause of the 1970 Clean Air Act called Section 111(d) that runs merely a few hundred words and historically has been applied only to minor pollutants, not the entire economy.

The new rule is unprecedented because EPA is supposed to regulate "inside the fenceline," meaning that its command-and-control powers are limited to individual energy generator sources. The agency can tell America's 3,000 or so fossil-fuel power units to install on-site technology like scrubbers to reduce pollution, but not beyond."

"The agency recently rejected state plans to reduce regional haze before they are even formally proposed and revoked permits it had previously approved.

The EPA also claims that by some miracle the costs of this will be negligible,"

"the government is essentially creating an artificial scarcity in carbon energy. Scarcities mean higher prices, which will hit the poor far harder than they will the anticarbon crusaders who live in Pacific Heights. The lowest 10% of earners pay three times as much as a share of their income for electricity compared to the middle class."

"The EPA plan will also redistribute income from economically successful states to those that have already needlessly raised their energy costs. The New England and California cap-and-trade programs will get a boost, while the new rule punishes the regions that rely most on fossil fuels and manufacturing:"

"Notably, these plant retirements may endanger the reliability of the electrical grid. This winter's cold snap showed that traditional power is essential to keeping the lights and heat on, and the risk of rolling blackouts is real as the EPA re-engineers the system.

The irony is that all the damage will do nothing for climate change. Based on the EPA's own carbon accounting, shutting down every coal-fired power plant tomorrow and replacing them with zero-carbon sources would reduce the Earth's temperature by about one-twentieth of a degree Fahrenheit in a hundred years."