Study: Obama's EPA Rules Will Disproportionately Hurt the Poor

Study: Obama's EPA Rules Will Disproportionately Hurt the Poor

A new study finds that the harsh new carbon emissions rules President Obama’s Environmental Protection Agency released this month will hurt the middle class far more than the rich. However, while the new rules will cause the middle class to take a hit, America’s poorest will be hit hardest of all.

The study by The Manhattan Institute discovered that the top 20% of earners pay only 4% of their income on energy while the bottom 20% pay a whopping 24%. This means the massive hikes in electricity rates expected under the new rules will disproportionately affect the poor.

The study discovered that “those in the lowest fifth of income earners spend the greatest share of their incomes on energy (defined as natural gas, electricity, and gasoline and motor oil). Earners in the lowest income quintile spend 24 percent of their pre-tax income on energy, while those in the highest income quintile spend 4 percent–the same as in 2012. Even though high-earners spend more on net, it is the poor who will have their budgets squeezed as they struggle to pay for gas and electricity.”

Even while Obama’s tough new standards will hurt our most vulnerable citizens, the study also finds that the EPA’s new rules won’t really do a thing to stop the very global warming that Obama is worried about.

“The pain inflicted on the poorest Americas will not reduce global emissions,” the Manhattan Institute report says.

“The EPA’s new rules will have a negligible [effect] when it comes to soaring global carbon dioxide emissions and surging global demand for coal,” Manhattan Institute senior fellow Robert Bryce said.

The report finds that global CO2 emissions rose by 723 million tons in 2011. The Obama administration’s new EPA rules would cut U.S. emissions by approximately that much over the course of the next 16 years.

Further, Obama’s imposition of economically harmful rules on our own country won’t do a thing to put a dent in emissions by other leading nations such as India or China.

China emits the most CO2 in the world. As the report notes, “in a six-year period, China’s coal-related emissions increased by four times the size of the reduction that the EPA is seeking over 16 years.” Obama’s new rules are essentially a drop in the bucket.

Cheap and abundant energy is one of the key ingredients that can bring a nation the sort of prosperity the USA has enjoyed for decades. Naturally rising powers such as China, India, and other nations won’t easily give up their own piece of the pie to satisfy Obama’s worries over global warming.

“The EPA and the Obama Administration should rethink this meaningless, job-killing regulation,” the Manhattan Institute says. “The inevitable rise in utility prices will disproportionately affect those with low incomes, a group that has been continually hurt by the slow economic recovery. If, as Mr. Obama has stated before, ‘inequality is the defining challenge of our time,’ it makes no sense to push regulations that hurt the poor most and the wealthiest least.”

Follow Warner Todd Huston on Twitter @warnerthuston or email the author at


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