There is little debate that America’s infrastructure plays a critical role in the economy. Roads, bridges, shipping facilities, airports, the energy grid, and other vital industrial elements all play a crucial part in the ability of the nation to produce and deliver goods and services in the most efficient way possible.
Despite this importance, some in Washington have asserted that Americans must also pay for unrelated energy policy proposals if they want better infrastructure.
Amid negotiations for a massive infrastructure improvement package, political leadership on the Left has insisted that the infrastructure bill include provisions to implement President Biden’s energy policy agenda. One such proposal in this agenda is a call to expand federal energy regulations through the reduction of carbon-based fuels.
A key stated goal is to reduce carbon and other greenhouse emissions to approximately half by 2030. An additional proposed mandate is that the nation’s electrical grid completely transitions away from carbon-based fuels such as coal, natural gas, and oil by 2035. In light of the high cost of transitioning from carbon fuels, such federal mandates would be detrimental to the state of Mississippi. The state’s economy and citizens are highly dependent on affordable energy.
From the economic angle, it is important to note that Mississippi has the 2nd highest level of energy expenditures per dollar of GDP. This means that Mississippi’s economy needs more energy than most other states to produce its economic outputs. Mississippi also has the 8th highest amount of carbon output per dollar of GDP. This carbon output makes sense. Many of Mississippi’s top industries, such as agriculture and manufacturing, have very high energy consumption and utilize affordable carbon fuels such as natural gas and coal.
These economic factors would cause Mississippi’s economy to be disproportionally affected if the federal government mandates a reduction in the use of carbon-based energy fuels. Meanwhile, other states with less energy-intensive sectors (such as finance and administration) would be less affected. Thus, Mississippi would be in a competitively disadvantaged position at the hands of a federal carbon-reduction policy.
On top of the macroeconomic effects of more expensive energy, raising the cost of energy by requiring more costly fuels with a lower carbon output could be devasting for some Mississippians on an individual level. According to the Energy Information Administration, the state of Mississippi ranks among the highest in the nation for its consumption of energy per person.
As a predominately rural state with many in poverty, Mississippi’s energy consumption per person is an important factor to note. A study found that the rural poor spend a high percentage of their income on heating and cooling their homes since many rural homes are not as well-insulated as their suburban and urban counterparts. An additional study found that when energy costs go up, many of the poor reduce their heating and cooling to save money, with resulting health issues and the accompanying medical expenses.
Mississippi and its citizens should be able to utilize the most affordable and efficient energy sources without the heavy hand of federal overreach. Instead of using infrastructure negotiations as an opportunity to impose unprecedented restrictions on carbon-sourced energy, leaders in Washington should focus on the nation’s infrastructure needs.