Inflation May Make People Less Likely to Back Climate Policy

The last couple of years have brought a long list of headlines that should alarm anyone concerned about the changing climate, from the growing number of climate-linked disasters to the resilient growth in oil and gas. But beneath those headlines another apparent trend should alarm anyone advocating for climate policy: economic conditions may be making people less willing to pay to tackle climate change.

Only 38% of Americans would be willing to pay a $1 per month carbon fee to address climate change, according to new polling released Tuesday from the AP-NORC Center and the Energy Policy Institute at the University of Chicago. That’s the lowest level of support since the poll began in 2016, and it represents a 14 percentage point decline since 2021, the last year the poll was conducted. A smaller share of respondents said they would be willing to pay higher amounts. The survey found that just over 20%, for example, would pay $100.

Though the poll didn’t delve into the reasoning behind this particular shift, it’s easy to surmise how economic conditions might reduce Americans’ willingness to pay to address climate change. Last year, the consumer-price index, which measures what consumers pay for goods and services, showed a significant spike in costs, with prices at least 6% higher than the year prior in every month of the year—and at some points significantly higher than that. Meanwhile, volatility in the stock market has rattled consumers with large savings.

Trepidation about the costs isn’t just reflected in polling, it’s a reality seemingly borne out on the ground, too. In late March, Berlin voters failed to pass a referendum that would have committed the city to eliminating its carbon foot print by 2030, with some commentators citing concerns about cost as an explanation for why the typically left-leaning city would reject such a measure. (Berlin apartment rental prices, for example, have risen dramatically in recent months).

Last year, I saw this dynamic in San Diego in response to a new policy to create a modest fee for using the roads. The policy was designed to make up for the government revenue that would be lost as more drivers switched to electric vehicles and stopped paying the gas tax while also encouraging drivers to consider public transit.

The backlash was visible in every corner of the region. I visited an anti-road usage fee rally in one suburb. In another suburb, this one reliably blue, I met with Laura Lothian, a Trump supporter who was recently elected to the La Mesa city council on the basis of opposition to the road usage fee. “This issue brought out everybody—and it changed things,” Lothian told me.

Many elected officials—including in the Biden Administration—have tried to get ahead of such concerns by framing their climate policy around easily digestible economic messaging. The Inflation Reduction Act (IRA) relied largely on incentives rather than penalties to reduce emissions. That is, the law gives out money to reduce the cost of everything from renewable energy to electric vehicles to clean household appliances while doing little to raise the costs. This has a strong political logic, avoiding the pitfalls of policies that might raise costs. Corporations have little reason to fight policies that actually give them money to reduce emissions, and, of course, consumers don’t mind the cheaper goods. Indeed, in the same AP-NORC poll that showed a declining willingness to pay for climate change, more than 7 in 10 respondents said that they would consider switching to an electric vehicle to save on gas.

The IRA may avoid the risks posed to other climate policies that raise costs for consumers—think of carbon taxes and other prices on emissions. But there’s one big problem: most estimates of the law’s impact suggest that it will leave the U.S. around 10 percentage points short of the Biden administration’s emissions-reduction goals. Meeting that target might require policies that rock the boat—and raise costs.

None of this should suggest that government shouldn’t pursue climate policy further and that businesses should stop emissions-reduction programs in their tracks. Indeed, research has shown time and again that action now will protect our economic wellbeing in the future. An analysis from the U.S. Office of Management and Budget, which manages federal budget issues, found that climate change could make U.S. GDP 10% lower than it would be otherwise by the end of the century. And, while the cost of transitioning the world to clean energy measures in the trillions annually, that money acts as an investment that creates jobs and generates revenue for countries.

But, even with that clear economic logic, concerns about the immediate cost to individuals should serve as an omen: to enjoy continued support, climate policy needs to be socially sustainable.

Todd Gloria, the Democratic mayor of San Diego, explained the challenges of having to thread the needle with the road-usage fee. “There’s a tension with implementing this plan at a rate that people can accept, against the backdrop of the climate crisis, of economic challenges and other externalities,” said Gloria, who supported the road-usage fee before reversing his position amid the backlash. “People often are fearful of change, and they often resist it until they can see it.” It’s a useful lesson not just for San Diego, but for democratically elected policymakers everywhere.