California’s policy to shift to green energy is built on a program of incentives that too often are gobbled up by the rich while the middle-class and poor often struggle with energy costs.
Energy cost is often charged on a tier basis – the more you use the more you pay. Not too many air conditioners are needed in the coastal areas. But that is where California’s wealthiest tend to live. In the inland areas, people are usually paying more for their energy. Given the climate, solar would serve the inland areas well, but the cost can be hard to handle for middle-class and poorer residents.
Subsidies and incentives are often talked about as solutions to encourage people to turn to renewable energy. California has set up a Go Solar Initiative to help homeowners and businesses to achieve conversion to solar energy.
But, in California, incentives for clean energy and carbon reduction often end up with the well-off and those who can make investments in expensive alternative energy equipment and motor vehicles.
As the Wall Street Journal editorialized a couple of months ago, California subsidies to encourage a reduced energy lifestyle often end up with those on the top end of the economic ladder.
The editorial began, “California’s green regulations often drive national policies, so it’s worth pointing out how its programs to cut vehicle emissions have become a gravy train for the 1%.”
Among the list of complaints in the editorial:
To get more electric cars on the road, the state also offers consumers $2,500 rebates financed by a $20 “smog abatement fee,” which all drivers in the state must pay for their first six registration years. The rebate is on top of the $7,500 federal tax credit and $1,000 or more the state pays drivers to retire their gas guzzlers. The combined government incentives can reduce the price of a Nissan electric Leaf to about $18,000.
But wait: According to state survey data, the typical rebate recipient earns over $150,000 and owns at least one other non-electric car. About 80% hail from the Bay Area, Los Angeles and Orange County. The most popular car among rebate recipients this year has been Tesla’s Model S sports sedan, which runs between about $70,000 and $100,000.
The editorial said requests for the rebates are surging and that the legislature had to appropriate more funds for subsidies. That led to the legislature extending vehicle fees and surcharges to help cover the costs of the program.
The editorial concluded — To recap: California’s emissions mandates are so onerous that they require mandates for electric cars that consumers won’t buy without subsidies that go mainly to the wealthy and that are now so expensive that they have become another drain on the state budget. Look for the middle class to be hit with a fee or tax increase to make up the difference.
The quest for clean energy shouldn’t be built on programs that benefit the rich at the expense of all taxpayers. This dichotomy of demanding a green energy policy while subsidizing the rich is out of balance.