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.”
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.”
“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.”
“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.