Politics & Policy

Start with Common Ground on Climate-Change Policy

Houses in a suburb of Denver, Colo. (Rick Wilking/Reuters)
Can we address climate risk and respect energy choices? Yes.

Climate policy is a central aspect of the Democrats’ 2020 platform. Nomination front-runner Joe Biden calls climate change “an existential threat — not just to our environment, but to our health, our communities, our national security, and our economic well-being.” His rival Bernie Sanders goes even further, deeming climate change “the single greatest challenge facing our country.”

The Democratic Party’s climate-change reflex is to use regulations and taxation to limit the use of affordable carbon-based energy. But Democrats will run into significant electoral hurdles if they elevate those plans to the forefront of their campaigns. Like it or not, people across the globe have proven averse to policies that limit their energy choices and make their lives more expensive. French president Emmanuel Macron is still experiencing backlash from his 2018 fuel-tax increases, which instigated the “yellow vest” protests. Australia, likewise, implemented a carbon tax in 2012 before repealing it just two years later.

To put it bluntly, people like cheap energy. Are there any policy options that could both mitigate climate-change risks and respect our energy choices? The answer is yes.

An ideal starting point for a unifying, cross-partisan plan would be zoning reform. According to the New York Times, it is illegal to build anything other than a single-family home on 75 percent of land zoned for residential use in the United States. This type of policy, for which neither Republicans nor Democrats are solely responsible, artificially flattens our cities, pushes more of us into cars for hours on end as we fight traffic, and increases our greenhouse-gas emissions as a result. According to a study by Istvan Bart of the Climate Strategy Institute, urban sprawl bears more responsibility for increased emissions from transportation than either population or GDP. Furthermore, single-family homes are voracious per capita energy consumers relative to apartment buildings. Allowing more-varied land use in residential areas could significantly reduce the carbon intensity of our economy while also allowing people to live in the denser communities that many people find more rewarding. It’s a potential win for both climate activists and advocates for economic liberty.

Another discussion with fertile ground for agreement is about how people deal with the risks that a warming world presents. Two commonly cited climate-change impacts are rising sea levels and increased wildfire frequency. Insurance markets, we’re told, are already responding to these risks. So why are our policies hampering that natural market response?

The National Flood Insurance Program (NFIP) essentially does the opposite of what a sensible climate policy would. Instead of accounting for the future, the NFIP incentivizes people to put themselves and their property in areas that we’re told are the most vulnerable to climate change. According to the R Street Institute, new development has grown faster in the very floodplains we know are at increased risk than it has in safer areas. R Street recommends an obvious first step: put a stop to this perverse incentive by ending federal insurance on new construction in 100-year floodplains.

In a similar example of public policy’s increasing the likelihood of damages, the California state government has now prohibited private insurance companies from acting in accordance with actuarial assessments. The state has placed a “moratorium” on expirations of policies for homes that lie at the dangerous wildlife–urban interface (WUI). The WUI is where nature meets development, and it demands caution from insurers. The ban in effect forces insurers to offer coverage for over a million homes that they might otherwise judge too risky. That means more of our private and public resources are likely to go down in flames if wildfires really do become more frequent.

Another step toward resolving contradictory environmental policy is to put a premium on energy density, rather than on energy mandates. Some sources of energy take much more space than others to produce the same amount of power. Ironically, there can be significant ecological costs to low-density sources of energy, such as wind and solar. In Scotland, for example, it’s estimated that close to 14 million trees have been chopped down over the past couple of decades to make space for wind turbines. When we consider the value of trees as natural carbon sinks, the wind turbines that replaced them look even less appealing. Yet across the globe, governments are subsidizing the energy sources that take up the most space and increase our ecological footprint.

Climate policy is a divisive issue, but increasing the cost of energy is a losing strategy for politicians of all stripes. If Democrats want to avoid the reactions seen in France and Australia, they should seek climate policies that avoid driving up energy costs. They should instead prioritize minimizing existing distortions that inflate our emissions, and maximizing our freedom to deal with climate risks. Fortunately, a number of policy options exist that could do just that.

Jordan McGillis is the deputy director of policy at the Institute for Energy Research.

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