Ohio cannot afford the European Union’s energy policies

James Bowman Dec 23, 2016

The European Union (EU) has notoriously high energy prices that hurt families’ pocketbooks and make EU businesses less competitive in the global marketplace. Following Europe’s lead and implementing its brand of energy policies in the United States would drive up prices and prove devastating for Ohio.

According to The Institute for 21st Century Energy, the EU creates incentives for member states to subsidize inefficient energy sources such as solar and wind, and penalizes them—through exorbitant taxes—for using traditional sources such as coal and natural gas. EU taxes on carbon emissions and energy consumption have led to skyrocketing fossil fuel prices. Compared to the U.S., for example, motor fuel costs nearly a dollar more per gallon on average in the EU, and carbon dioxide taxes are 20 times higher.

Adopting EU-style energy policies would have similar effects in the U.S., and would be particularly harmful to families and businesses in states like Ohio.  Ohio relies heavily on conventional energy sources, with energy-intensive manufacturing comprising nearly one-fifth of the state economy. The Institute for 21st Century Energy estimates that EU energy policies would cost Ohio over 187,000 jobs, and families would be forced to spend approximately $5,000 more per year on natural gas, electricity, and gasoline than they do already.

These are losses and expenses that Ohio simply cannot afford as she continues to regain her economic footing. As The Buckeye Institute recently reported, September was the fourth straight month that the number of Ohioan’s looking for jobs declined. Adopting regressive energy policies will not pave the way to prosperity, especially when bad economic news fills the headlines.

Unfortunately, the Obama Administration has worked for eight years to implement regressive, EU-style policies in the United States. The federal EPA’s controversial “Clean Power Plan,” for instance, sets unrealistic, job-killing, price-hiking targets for carbon dioxide emissions from power plants and removes power and autonomy from the states to govern their own energy production. Last year, Mr. Obama proposed to set aside $100 million to subsidize the solar and wind industries, and charge higher tax rates on fossil fuels that would have cost coal and oil producers $2.5 billion over ten years. Thankfully, these proposals were rejected.

The Buckeye Institute has opposed the Clean Power Plan power grab, resisted severance tax hikes on fossil fuel producers, and identified the costly effects of implementing Renewable Portfolio Standards in Ohio—a policy that failed to replace traditional energy jobs with renewable energy jobs and raised energy prices for Ohio families. Fortunately, President-elect Trump has thus far indicated that he will not pursue the EU-style policies set in motion by the Obama Administration. Mr. Trump has spoken against subsidies for wind and solar energy producers, and may well repeal restrictions on oil and coal production adopted by the Obama Administration.

As the incoming Trump Administration looks for ways to “make America great again,” it should reject the course set by Europe and its bureaucratic micromanagers.  Energy policy and the health of the U.S. economy go hand-in-hand. Energy mandates from Washington inevitably limit competition and innovation, which in turn stalls economic growth. The U.S. would be better served by federal policies that return energy choice to consumers, allowing for natural growth in the renewable resource industry rather than government-mandated requirements that effectively pick the winners and losers in the energy market for us.

The United States cannot afford Europe’s heavy-handed approach to energy, and neither can Ohio.