Action on climate change must consider all citizens

By David Osterberg

Climate change policy should recognize differences in incomes of those expected to make changes to reduce the climate change that is a danger to the planet.

Negotiations under way in Copenhagen to craft policies to combat climate change will hit rich countries differently from poor. Agreement will probably happen on programs to transfer energy efficiency and renewable energy technologies to poor nations so they can develop economically on a path different from our high carbon dioxide-emitting path. Funds to help implement this new technology will also need to be transferred from rich to poor countries.

Otherwise, developing countries will not be able to afford the costs of transitioning from cheap, dirty methods of producing energy to smarter, cleaner, but initially more expensive ones.

Within the United States, the difference in income levels also needs to be recognized in crafting climate change policy. Initially, making coal and other fossil fuels account for their environmental and health effects will increase energy prices.

Higher-income Americans can offset the higher costs of a gallon of gas or kilowatt hour of electricity by investing in efficiency actions such as installing insulation or combining car trips. However, some of this personal investment strategy is out of the reach of low-income Americans. That realization was written into the climate change bill passed last June by the U.S. House.

This legislation mandates that consumer relief payments go to low-income households to compensate for higher expenses they will face for energy and energy-intensive goods and services. When combined with other relief that households at all income levels will receive, this targeted relief is enough to, on average, fully offset the expected increased costs that low-income households will face.

In Iowa, approximately 579,000 low-income citizens - 20 percent of Iowans - would be eligible for this direct low-income consumer relief.

Doing more for our most vulnerable citizens is also in the Senate version of the bill that passed out of the Senate Environment and Public Works Committee this November. However the Senate version reserves somewhat fewer resources for directly assisting low-income citizens.

In addition, the economic recovery bill (ARRA) passed last February, recognizes that low-income people find it difficult to insulate their homes and upgrade furnaces and other appliances to use less energy. Community Action Agencies in Iowa and around the nation were given a large boost in funds to ensure that homes of the poorest families use much less energy.

While the program had been spending about $15 million per year on weatherization, ARRA gave Iowa an additional $80 million over three years. The work is currently under way.

Climate change policy - at both the federal and international level - must recognize the disparity in economic ability to make the necessary changes. This is true for countries and for individuals.

David Osterberg is executive director of Iowa Policy Project, a nonprofit, nonpartisan organization producing research and analysis on state tax and budget issues, the economy, and energy and environmental policy.