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Easing Energy Inequities

When energy policies provide more than efficiency

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Emissions trading, or cap and trade, is a permit-based approach to controlling pollution that offers companies economic incentives for reducing emissions. The permitting process limits the amount of total allowable emissions while enabling companies to purchase additional permits from those producing fewer emissions.

California’s cap and trade program—the fourth largest in the world according to Yale Environment 360—raises billions of dollars for the state each year. A portion of that revenue is being allocated to supply disadvantaged communities with renewable power and energy efficiency upgrades that save them money over time.

Many communities are considering, researching, or implementing microgrid solutions. The underlying rationale often involves complex business, operational, and economic issues. See our FREE Special Report: Understanding Microgrids. Download it now!

Energy insecurity is often connected to complex social issues within disadvantaged communities such as low homeownership rates, limited disposable income, and sub-standard housing conditions. For the economically disadvantaged, choosing to heat homes or eat is a reality.

Furthermore, the American Council for an Energy-Efficient Economy found in a 2016 study that low-income households pay more for utilities per square foot than the average household—in some cases triple the rate—an inequity that can perpetuate economic hardship.

Today, California state law directs that 35% of greenhouse gas auction proceeds benefit low-income neighborhoods and disadvantaged communities. The goal of initiatives such as the Low-Income Weatherization Program (LIWP) is to democratize climate policies and benefits. The State estimates that, by putting its cap and trade dollars to work, LIWP has reduced program participants’ energy use by an average of 44%, also reducing their out-of-pocket expenses.

An increasing number of other state governments have implemented similar programs. Auction proceeds from the Regional Greenhouse Gas Initiative, a coalition of nine Eastern states, also support programs that help low-income residents with their energy bills.

What are your thoughts? Can energy efficiency initiatives offer long-term benefits for disadvantaged communities? What programs do you think best address the issues surrounding energy security? DE_bug_web

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Comments

  1. California has wonderful ideas and implements some of them. Unfortunately, many of the ideas that get implemented have wonderful names dealing with climate change, clean water and air or other pet areas. These ideas are particularly wonderful if you work for the State of California, since they rarely come without a new and/or expanded old bureaucracy full of State employees. California politicians seem to like playing the role of Robin Hood, take from the rich and give to the poor; however there are benefits for Robin Hood. First, the California-based Robin Hood gets to decide who are the rich and who are the poor. And then, Robin’s Merry Men have a significant operating expenses. The Beatles’ Taxman lyrics explain it quite well “There’ one for you nineteen for me…” Once again the unintended consequences (or are they really “intended” consequences?) are that businesses that are impacted have 3 options: 1. Move some or all of those operations out of state taking the jobs and frequently high paying wages with them; 2) Raise prices if they can; or 3) Close if they can’t move or raise prices sufficiently. The higher prices then put more strain on the “poor” justifying further increases in Robin’s appropriations.
    Robin Hood is also very good at magic – money that was supposed to go to clean air helps fund the high speed rail to nowhere, and then guess what we taxpayers are told that “Oh the cost is now higher than estimated.” However the Merry Men and the associated Sherriff’ and contractors go on forever. You have to love the happy Hollywood endings!

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