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November 28, 2018

Energy policies imposed in California and New York are turning these states from shining examples of the American Dream, to an American nightmare, harming the poor and small businesses.

It is becoming harder and harder for poor and middle class families in California and New York to obtain the American dream due, in part, to over-zealous laws and regulations, particularly policies aimed to fight purported human caused global climate change. California and New York have imposed policies which increase the costs of fossil fuels while subsidizing politically favored energy sources.

“Since the resources to subsidize favored energy sources must come from somewhere, regardless of the goal chosen, these policies impose additional costs on California’s and New York’s economy. Raising the cost of any activity decreases its amount – it’s basic economic logic. The CA-NY approach to global climate change increases the costs of energy use in these states, which result in higher consumer costs, higher production costs, less energy use, and large economic losses.

CA-NY approach raises energy costs, imposes costly burdens on lower-income families, and discourages economic activity. These consequences fall into several categories including:

  • Higher costs of living caused by higher electricity and gasoline prices.
  • As a result, energy expenditures are $21.2 billion and $6.3 billion higher in California and New York, respectively, relative to the average U.S. costs per Btu.
  • Less economic activity due to the higher residential, commercial, and industrial electricity costs, which is exemplified by the exodus of businesses out of both states.
  •  increased costs on families, which contribute to California’s and New York’s highest and 7th highest poverty rates in the nation, respectively (based on the supplemental poverty rates that adjust for factors such as differences in the cost of living).
  • Increased cronyism due to the politicization of the economy.
Dr. Winegarden’s policy research explores the connection between macroeconomic policies and economic outcomes.