Biden’s Climate Justice Plans Will Hurt the Global Poor

President Biden’s recent speech at the Virtual Leaders’ Summit on Climate was confusing. Speaking to 40 leaders from advanced, emerging, and developing countries, he reveals his dream of bringing well-paying, middle-class, union jobs to struggling American communities. He starts his speech by saying, “When people talk about climate, I think jobs.”

In the following minutes, he underlined his administration’s mission to use climate panic to achieve his major domestic policy goal: an infrastructure plan. Biden hopes large, government-funded projects will create jobs as a back door solution to the pandemic fatigue in the American economy.

Ultimately, the group of global leaders only heard about measurable goals and desirable climate outcomes two or three times and without any mention of estimated costs.

While an estimated 1.2 billion people in the world do not have any access to modern electricity, Biden’s plea that global leaders follow the USA’s path through overhauling their infrastructure—will mean some emerging and developing nations will miss critical energy-driven industrial economic growth—is an unfortunate demonstration of inconsiderate Western energy policy domination. 

President Biden signed his first executive order to tackle the supposed “climate crisis” on the same day he took his oath of office and signed a second within a week. These all-encompassing twin executive orders go well beyond the scope of environmental policies. Avoiding any form of cost-benefit analysis—a typical tool for environmental policy justification—they promise to build modern sustainable infrastructure to deliver an “equitable” clean-energy future that would fight environmental injustice and racial inequality. 

Joe Biden’s campaign platform supported the Green New Deal, which also avoids general cost-benefit calculations by including unmeasurable goals such as “racial justice” and “reducing inequality.” While social injustice and racial inequality are urgent issues and need serious attention by policymakers, throwing these phrases around so lightly in the context of climate, if anything, is almost disrespectful to the depth of these social issues. To raise these issues to achieve unrelated political goals is distasteful in the most obvious way.

After persistently criticizing the Trump administration for four years over allegedly unjustifiably invoking national security measures for achieving trade policy goals, President Biden is following suit by invoking national security to achieve environmental policy goals. Addressing the “Climate Crisis” is now the central goal of US foreign policy and national security. A protective tariff is also on the horizon since Biden’s “Buy American” plan includes a “carbon adjustment fee.” These plans signal that the US will first rob impoverished nations of hope for development through climate agreements, then use prohibitive tariffs to profit from them. 

Bjorn Lomborg, a staunch supporter of using market innovation to battle climate-related issues, also recognizes the climate cruelty of this new western strategy:

For the rich world to cut 20% of its emissions, a standard model shows it’ll cost them $310 billion a year. Using carbon tariffs, the rich world can instead end up $400 billion better off, making $90 billion by forcing businesses to move back to the rich world. Instead, they impose more than half a trillion in extra costs onto the world’s poor.

Climate degradation is a global problem and needs expert analysis using cost-benefit estimations to solve. During the Trump era, the political right did not help to create a truthful narrative. Insincere comments by republican politicians led people with genuine concerns astray. Now the issue is hijacked by extreme leftist sentiment which is engendering panic in well-meaning American’s minds.

Rather than put the fate of our environment in the hands of technocrats, these cost-benefit analyses could be conducted by individual innovators and investors so as to speed up the process and quickly create results.

Although a Washington Post poll reveals Americans are increasingly seeing climate change as a crisis, they are not even willing to spend $24 a year on this issue. The current Biden plan to spend $2 trillion in his first term is equivalent to spending $1500 per American every year. Another AP-NORC survey finds 68% of Americans are not willing to pay as little as $10 a month extra on their electric bills. 

Furthermore, In 2018, Washington state voted down a carbon tax ballot initiative. It is abominable for advanced nations, including the US, to propose a climate tariff that would hurt low-income countries and their dwelling communities when they would not implement one at home. Sadly, the empathy offered through the Biden plan, although misplaced, only pretends to serve individuals struggling in developed countries. It is nationalism and protectionism in sheep’s clothing. 

Tellingly, a carbon tax is the only measure that receives large-scale consensus from economists. However, a domestic carbon tax will be extremely unpopular. First: because no one likes new taxes; second: because there is a growing concern that a carbon tax will be regressive—meaning the tax burden will fall more heavily on low-income families. 

A paper, sharing more optimism about a more equitable carbon tax, shows carbon taxes can be progressive preconditioning of how the tax revenue will be spent. The paper finds that the richest 5 percent of households have at least 10 times the income of the poorest 20 percent, but those rich households use only 4 times more gasoline making carbon tax regressive because the richest would pay a lower share of their income. But if the revenue were then redistributed equally to all households, the overall tax+redistribution would be progressive because poorer families would get back more money than they paid.

It is increasingly important to re-confirm, climate degradation is an issue that deserves sincere attention by policymakers, academics, innovators, and investors. But it needs to be in the hands of technology innovators, not hyperbolic politicians. The global poor are more exposed to easily avoidable climate-related risks due to their inability to adapt. Poorer countries suffer from catastrophic losses at the emergence of any disaster or ecological depletion. Implementing policies that will promote growth, lift people out of poverty, and replace their flimsy corrugated roofs with modern, durable homes will be a more effective means to the same goal—protecting the most vulnerable people against climate-related risks. 

A more direct and immediate way that the government can address these issues is to first eradicate anti-green subsidies and invest in private research and development. 

A FEMA-run national flood insurance program currently incentivizes people to live in flood-prone areas by artificially lowering local insurance rates. Privatizing flood insurance in these areas will allow homebuyers to understand true risk. The number of Americans living in Special Flood Hazard Areas has increased from 10 million to more than 16 million since 1970. Similarly, water supply subsidies have incentivized living and farming in drought-prone areas. Meanwhile, infrastructure subsidies have encouraged Californians to live in dangerous fire zones, recent wildfire losses are a testament to that. 

A World Bank-UNDPR study highlights how the stifling market mechanism exacerbates disaster-related loss. For example, rent control in Mumbai has caused landowners to neglect basic upkeep for many old constructions. These buildings, unsurprisingly, collapse more easily during monsoon downpours. 

Innovation should be at the center of environmental degradation discussions.

Bjorn Lomborg offers the example of Los Angeles air pollution in the 1950s. This was fixed with the invention of the catalytic converter which allowed longer drives and lower pollution. Former President Barack Obama and Bill Gates brought together world leaders in 2015 to double their R&D investment, regrettably, no materialization of their plan is in sight. 

Thus far the US government avoided all the effective solutions on the horizon to truly address the health of the planet in a collaborative, bipartisan manner. Instead, Biden’s policies follow in the spirit of the Green New Deal, which includes free health care and free college for all, in the spirit of painting over important issues with focus-grouped environmental platitudes. His administration’s vague and never-ending list of expenditures to create jobs, build infrastructure, and impose envisioned environmental justice via his twin executive orders prompt skepticism about his true policy goals.

Could the goal be causing a public panic about climate change to use the momentum to achieve a whole package of party agenda? Whatever the intention might be, as a consequence the US is asking the global poor to skip a fundamental stage of development—energy-driven industrial growth—so that US voters have a clear conscience when they vote blue.