First on CNN: White House economists say a clean energy transition will lower consumer costs

By Ella Nilsen, CNN

In a blog post shared first with CNN, White House economists argue that President Joe Biden’s climate agenda will not only cut carbon emissions but also bring down costs for consumers.

White House Council of Economic Advisers member Heather Boushey and council economists Noah Kaufman and R. Daniel Bressler write that the climate and clean energy provisions in Biden’s budget bill and a bipartisan infrastructure bill will increase energy efficiency, cut electricity costs and protect consumers from the “high costs of inaction” on climate.

“While President Biden’s Bipartisan Infrastructure Deal and Build Back Better Agenda will create good-paying, union jobs and grow an equitable economy, many fear that reducing carbon emissions will place a burden on consumers through higher prices,” the economists write. “Carbon emissions are embedded in the prices of many of the goods and services that a typical American consumer purchases, like food, housing, and transportation.”

The post comes as Biden is trying to convince two moderate Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, to support his $3.5 trillion budget bill. The President met separately with both senators at the White House on Wednesday. Manchin has said he’s concerned about the bill’s climate provisions, and he has written that he opposes the bill for fear it will spur inflation and pass mounting debt to future generations.

In their blog post, the White House economists write that the costs of not responding to climate change through Biden’s legislation will be steep.

“Our collective failure to address climate change will continue to add costs to family budgets in the decade to come, which can be reduced if we can bring down carbon emissions now,” Boushey, Kaufman and Bressler write. “The United States has incurred about $120 billion per year in damages from extreme weather and climate events over the past five years, and these costs are on course to accelerate as the planet continues to warm.”

They also point to Democrats’ clean energy tax credits and clean electricity program, the latter of which gives federal grants to electric utilities that increase the amounts of clean energy in their portfolios and charge fees to those that don’t. Democrats say the clean electricity program will keep electricity costs low for consumers as utilities switch from fossil fuel-powered energy to cleaner sources.

“Direct subsidies to energy producers can limit the costs of clean energy to consumers and accelerate the transition to a carbon-neutral economy,” the economists write. “From a consumer cost perspective, this is preferable to alternative ways to reduce emissions, such as regulations that prohibit or limit carbon-based energy, which tend to be passed on to consumers in the form of higher prices of carbon-intensive energy.”

The three economists also write about provisions in Biden’s budget bill that would help consumers purchase energy-efficient appliances, and electric vehicle tax credits and investments into electric-vehicle charging stations that could bring down the cost of purchasing an EV. They cite Department of Energy analysis showing that 29 new or updated appliance standards enacted between 2009 and early 2015 were projected to save consumers $480 billion between 2009 and 2030.

“Well-targeted federal funding, such as consumer rebates for home retrofits, can incentivize investments that provide net benefits to the country while enabling American families to consume less energy—reducing energy bills in the process,” the economists write.

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