Inequality and the Politics of Climate Change

At the core of climate politics in the United States is a contradiction. On the one hand, experts agree that current market prices do not include the costs of climate change. The climate scientist James Hansen explains this point clearly: “At present fossil fuels are the dominant energy [source] only because the environmental and social costs are externalized onto society as a whole rather than being internalized into their prices.” The solution is disarmingly simple: levy a tax or fee on carbon emissions, so that the price of fossil fuels will reflect the true costs of combustion. Doing this would instantly make fossil fuels most costly and thus uncompetitive with renewable energy sources, whose prices are steadily declining. The market would then guide people and business to make new choices, propelling a transition away from fossil fuels and solving the climate crisis.

But this obvious answer becomes less obvious when we take into account that inequality is rising in the United States, which faces a widening gap between the rich and poor. For most Americans, the costs of things they buy are already too high. When this is pointed out to experts who advocate carbon taxes or fees, some dismiss the concern by blaming “overconsumption” as a major cause of climate change. Higher prices, they suggest, would helpfully force people to “consume less.” But, clearly, most economically strapped American households do not feel they are consuming too much. Some reformers like James Hansen want to reduce the impact of any carbon price increases by returning new revenues to households as dividend payments. But most members of the public still tend to assume that climate policies would impose increased costs on the economy and American households. Dealing with climate change may make sense, many Americans believe – but not if it imposes new costs on the middle class and the poor.

Climate deniers and fossil fuel interests have noticed this contradiction. The right frames resistance to climate politics as a matter of standing up for the interests of poor and working people. As the chief executive officer of Chevron bluntly put it, “I’ve never had a customer come to me and ask to pay a higher price for oil, gas, or other products.” Even the fossil fuel magnate Charles Koch offers a critique of climate policy he presents as on behalf of the poor: “I’m very concerned because the poorest Americans use three times the energy as the percentage of their income as the average American does. This is going to disproportionately hurt the poor.”

Inherent tensions make it easy for such actors on the right to frame policies that would raise the price of carbon fuels as a government conspiracy to tax hard-working and economically insecure people. Furthermore, such arguments gain a degree of credibility because their advocates usually come from the ranks of relatively affluent professionals, including scientists, journalists and highly educated policy experts. Given the ease with which simple climate policies can be made unpopular, no one should be surprised that a carbon tax failed to win a referendum in the “liberal” state of Washington – where it got only 42% of the vote in 2016.

Beyond Technocratic Fixes – Toward a Popular Climate Policy

Most advocates of carbon taxes or fees offer rather sterile visions of policy change. Their proposals rely on complex policy structures to modify market incentives. Logic and efficiency are their touchstones, not popular understanding or appeal. In theory, the carbon tax makes a lot of sense, but governments rarely adopt policies based on “reasonableness” and rational debate.  On the contrary, profound asymmetries of power shape often impassioned debates. 

Powerful fossil fuel interests have built enormous leverage in the U.S. political system through campaign contributions, investments in advocacy research, and organizations that lobby and mobilize activists. Leading politicians of both parties are influenced in this way, and reformers need to find a way to build democratic countervailing power, moving beyond logic and elegant policy frameworks.

To counter the power of the fossil fuel interests, climate reformers need to mobilize most Americans into a climate struggle – using a popular program to appeal to the majority of those grappling with rising inequality and economic insecurity. Instead of hoping for price changes that would make dirty energy cost more, reformers need to work for what the majority of people actually need: cheaper more affordable energy. This approach is what climate change journalist Kate Aronoff calls “low-carbon populism” – a fight for climate policies that blend economic and environmental justice.

Renewable energy offers an excellent way forward. After some upfront installation costs, renewable energy systems like solar and wind power have the capacity to provide free and inexhaustible energy. As Bill McKibben points out, this can, of course, present a threat to private, for-profit utilities, making it necessary to work through public programs rather than market incentives. Some renewable advocates, like Elon Musk, hope to profit from the green energy transition, but scholars and reformers concerned about climate trends should advocate instead for a massive public works program. This would involve using public funds to build renewable energy infrastructure – such as windmills and solar panels along with new transmission lines and charging stations – to deliver cheap or free energy to everyone. A public investment approach makes sense, because private firms tend to ignore long-term needs for infrastructure – and because climate change represents an urgent crisis requiring shared solutions.

The United States has historical precedents for this kind of public investment. When 19th century cities faced water pollution, they invested in massive public sewage treatment systems. During the 1930s New Deal, publicly funded hydroelectric dams and the Rural Electrification Administration. Woody Guthrie even sang folk songs about these dams: “Roll along, Columbia, you can ramble to the sea, but river, while you're rambling, you can do some work for me.”

To address the climate change crisis and to defeat entrenched fossil fuel interests, the United States needs to make it crystal clear that new public policies will materially better people’s lives. Although all of humanity should have an interest in a livable planet, logical solutions that ignore social inequalities are not enough. By advocating for public investments to deliver cheap renewable energy, reformers can advance solutions most Americans can get behind.