The Clean Power Plan’s Economic Impact: by Income Group and Local Area

Energy poverty, a term once reserved for developing nations, now threatens far too many families in the United States. According to a 2011 survey, 52 percent of respondents said that their energy bills were more difficult to afford compared to the previous year. Supporting these claims, the number of households receiving energy assistance from the federal government remained 40 percent higher as of 2014, compared to the average number of households requiring assistance prior to the Great Recession.

The Obama Administration’s intention to implement the Clean Power Plan (CPP) is particularly troubling in light of these affordability problems. If implemented, the CPP will reduce overall U.S. economic growth, increase average electricity expenditures, and worsen the problem of energy affordability for many U.S. households.

Beyond the macroeconomic costs that implementing the EPA’s Clean Power Plan will inflict, the CPP will disproportionately burden low-income and middle-income households across the country. Additionally, due to the untenable share of the lower-income household’s budget that unsubsidized electricity expenditures would require, the CPP will worsen the poverty trap facing too many households. It becomes clear that middle-income and low-income households can ill-afford the costs that the CPP will inflict on the economy.

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