Energy, Energy Regulatory Policy, Geopolitics
April 21st, 2016 1 Minute Read Issue Brief by Oren Cass

Issues 2016: Who Pays the Bill for the Obama Climate Agenda?

President Obama’s policies for tackling climate change would impose heavy costs borne disproportionately by lower-income U.S. households. His Clean Power Plan (CPP) and proposal for a $10.25-per-barrel oil tax are the equivalent of a $25–$30-per-ton carbon tax, which would cost America’s poorest families tens of billions of dollars per year.

  • Obama’s climate policies would cover four-fifths of U.S. carbon-dioxide emissions and would be similar in scope to an economy-wide carbon tax.
  • The cost of such policies would fall disproportionately on the lowest-income U.S. households, which spend more than 35 percent of their annual income on energy; by comparison, households in the top 10 percent of the income distribution spend less than 3 percent of their income on energy.
  • Obama’s climate policies would cost households in the lowest quintile $19 billion per year, equal to a 166 percent increase in their federal tax bills; households in the second-lowest quintile would pay an extra $25 billion, equal to a 33 percent tax increase.



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