Americans would pay more for clean energy. Would Congress?

at 11:01 AM ET, 05/14/2012

Would Americans be willing to pay more for cleaner electricity? A new study finds that they would — $162 a year extra, on average. But there’s a catch: This “willingness to pay” isn’t evenly spread across the country, which may explain why Congress isn’t eager to pass a clean-electricity bill.


Would you pay $162 for this? (Paul Sakuma - AP)
Last year, a trio of researchers from Yale and Harvard conducted a national survey asking Americans a very simple question: Would they be interested in a law that required utilities to get 80 percent of their electricity from low-carbon sources such as wind, solar and nuclear by 2035? Different respondents were given different descriptions of the bill and different price tags. (After all, low-carbon energy often costs more.) The results were recently published in Nature Climate Change. And, on average, $162 a year extra was the breaking point. That’s what Americans would pay.

There were a few twists. Democrats were willing to pay more than Republicans for low-carbon electricity. Older Americans were less willing to shell out extra. Southerners balked at the highest price tags. And respondents were a tad more reluctant to pay extra when they found out that the clean energy standard could include nuclear power and natural gas. “This result is not surprising,” the authors note, “given the negative publicity regarding shale gas hydraulic fracturing and the Fukushima nuclear accident.”

Still, the researchers — Harvard’s Joseph Aldy and Yale’s Matthew Kotchen and Anthony Leiserowitz — found that, on the whole, Americans were willing to endure a 13 percent increase in the price of electricity for cleaner sources.

As it happens, there’s an actual bill that would basically achieve all this. In the Senate, Jeff Bingaman has put out a Clean Energy Standard that would push utilities to get 84 percent of their power from lower-carbon energy sources by 2035. That includes natural gas, nuclear power, solar, wind, geothermal and biomass.

According to an analysis by the Energy Information Administration, the bill would increase electricity prices 4 percent by 2025 and 18 percent by 2035. That’s roughly in the acceptable range in the survey, perhaps a bit high. Bingaman’s bill, according to the EIA, would also cut carbon emissions in the electricity sector by 44 percent — mostly by replacing coal plants with natural gas, more nuclear power and renewables.

That doesn’t mean the bill could ever pass Congress, however. One thing that the Harvard and Yale researchers found was that people’s willingness to pay varies significantly by congressional district. So they looked at Congress. Assume that you need to get 218 votes in the House and 60 votes in the Senate to pass a bill and overcome a filibuster. Now assume that each politician will be responsive to the median voter in his or her district.

In that case, the researchers found, the clean energy standard would have to cost less than $48 a year to pass the House. And it would have to cost less than $59 a year to pass through the Senate and overcome a filibuster. That is, a clean-energy standard could pass if it increased rates by less than 5 percent.

In other words, clean-energy advocates shouldn’t get too excited about these polls. Yes, the average American may be willing to pay quite a bit more for clean energy. But that doesn’t mean Congress will follow.

 
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