Energy policy is leaving the middle class behind

By Maggie Koerth-Baker at 7:30 pm Wednesday, Oct 19

If you've paid much attention to policy in general, you won't be too surprised by what I'm about to tell you about energy policy. Many of our well-meaning public programs use tax dollars for the near-exclusive benefit of the wealthy—the group of people who need those shared funds the least.

Today I spoke at "What Will Turn Us On in 2030?", a conference about the short-term future of energy in the United States. At the conference, I met Lisa Margonelli, director of the Energy Policy Initiative at the New America Foundation. Margonelli has spent the last year researching the effects of high gasoline prices on middle class and working class families. (I'll be posting some more about that project later.) Along the way, she noticed some serious problems with the way we're currently trying to change energy systems in the U.S.—problems that actually endanger our ability to make real, long-term change.

The green policies put in place by the Bush and Obama administrations are not only not aimed at the middle class; they’re benefitting the wealthy at precisely the moment that high gas prices have slammed the lower middle class.

Consider the flashiest green support for consumers at the moment: tax credits for the purchase of electric cars and solar panels. Buy an electric car (more than $40,000) or a solar array (more than $20,000) and get a tax credit. But most American families making the median income (about $50,000) spend more per year on their old used cars and fuel ($7,900) than they do on taxes ($6,000). So a tax credit effectively steers the taxes they do pay toward those in the upper income brackets.

... Green products and technology need government support. We’ve given so much to high-carbon fuels and infrastructure that they have a built-in advantage, but we can’t afford to depend upon them in the future. If we want to give green energy real political legs, policymakers need to be sure that the middle class gets some of the green goodies that can save money: more efficient vehicles, household solar panels or water heaters, energy-efficiency upgrades. In fact, making sure that there's a middle class market for these goods is part of actually building a strong U.S. green industry—in much the way we built markets for cars, for houses after World War II, and even for home appliances. It’s actually a lot easier to build smart policies than it is to build a killer electric car or a scalable biofuel. But for some reason, we’re not doing it.