Report on Energy Policy, Affordability, and Sustainable Development Goals

Executive Summary

This report analyzes the impact of current U.S. energy policies on consumers and their alignment with the United Nations Sustainable Development Goals (SDGs). Recent data indicates a significant rise in residential electricity costs, with rates increasing by over 26% in the past five years. This trend, which has accelerated since 2021, is linked to a policy shift towards green energy. The analysis suggests a fundamental tension between the pursuit of SDG 13 (Climate Action) through government mandates and the achievement of SDG 7 (Affordable and Clean Energy), particularly its affordability component. The rising costs also have implications for SDG 10 (Reduced Inequalities) and SDG 8 (Decent Work and Economic Growth).

Analysis of Energy Policy and its Impact on SDGs

SDG 7: Affordable and Clean Energy

The core objective of SDG 7 is to ensure access to affordable, reliable, sustainable, and modern energy for all. Current policies, while promoting the “clean” and “sustainable” aspects through renewable energy, are reportedly compromising the “affordable” target. The transition to wind and solar power requires substantial upfront capital investment in new infrastructure, including turbines, solar farms, and grid-scale battery storage. These costs are not absorbed by utility providers but are passed directly to consumers, leading to higher energy bills and challenging the principle of energy affordability.

SDG 9: Industry, Innovation, and Infrastructure

The development of resilient infrastructure is central to SDG 9. The current energy transition involves a massive build-out of new infrastructure. However, the report suggests that this development is driven by policy mandates and subsidies, such as those in the Inflation Reduction Act, rather than by market demand or cost-efficiency. This approach raises concerns about the long-term sustainability and reliability of the energy infrastructure. Furthermore, mandates for electric vehicles (EVs) increase demand on the electrical grid, questioning whether the infrastructure is sufficiently robust to handle the increased load without compromising stability.

SDG 10: Reduced Inequalities and SDG 13: Climate Action

While government mandates for green energy are intended to advance SDG 13 (Climate Action), their economic consequences may counteract progress on SDG 10 (Reduced Inequalities). Rising energy prices represent a regressive burden, disproportionately affecting low-income households and increasing the risk of energy poverty. The financial costs of the climate transition appear to be placed heavily on consumers, which can exacerbate existing economic disparities.

Key Drivers of Increased Energy Costs

The increase in consumer energy bills is attributed to several policy-driven factors that distort energy markets. These factors challenge the balanced achievement of the SDGs by prioritizing specific outcomes over market efficiency and consumer cost.

• Federal and State Mandates: Regulations force utility companies to construct renewable energy infrastructure, regardless of the associated costs or immediate consumer demand.
• Inflation Reduction Act Subsidies: Financial incentives reward utilities for building expensive green energy projects, which may not represent the most economically viable or reliable solution for the energy mix.
• Forced Retirement of Conventional Plants: The premature decommissioning of functional coal and natural gas plants eliminates sources of affordable and reliable energy before replacement technologies are fully capable of meeting demand consistently.
• Top-Down EV Mandates: Policies that push for widespread EV adoption increase electricity demand without ensuring the grid infrastructure is adequately prepared to manage the additional load, impacting both cost and reliability.

Policy Recommendations for Balanced Sustainable Development

A Market-Based Approach to SDG 7 and SDG 9

To achieve a more balanced outcome for sustainable development, a shift towards a market-based energy policy is recommended. Such an approach would prioritize innovation, efficiency, and affordability, allowing for the most effective technologies to succeed based on consumer demand and performance.

1. Promote Consumer Choice: Empower consumers to select the energy solutions and vehicle types that best fit their financial and practical needs, whether it be rooftop solar, natural gas, EVs, or traditional vehicles.
2. Foster Market-Driven Innovation: Allow competition and market forces, rather than subsidies and regulations, to determine the viability of different energy technologies. This is projected to result in lower prices and more practical innovations in line with SDG 9.

Fostering SDG 8: Decent Work and Economic Growth

An energy policy focused on affordability and reliability can serve as a catalyst for SDG 8. By removing taxpayer-funded subsidies for specific green initiatives and investing in domestic energy production, including oil and gas, policymakers can pursue multiple objectives.

• Lower Energy Costs: Reducing the cost of energy for households and businesses can stimulate broad economic growth.
• Create Employment: Investments in domestic energy resources can create a significant number of well-paying jobs.
• Enact Permitting Reform: Streamlining the regulatory process to cut unnecessary regulations is essential to unlocking America’s full energy potential, thereby ensuring affordability and contributing to economic prosperity.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 7: Affordable and Clean Energy
   • The article’s central theme is the affordability of energy, directly referencing a “26% jump” in U.S. residential electricity rates. It discusses the transition to “green energy” sources like wind and solar versus fossil fuels, which aligns with the dual focus of SDG 7 on both affordability and clean energy.
2. SDG 8: Decent Work and Economic Growth
   • The article connects energy policy to economic outcomes, suggesting that investments in “domestic oil and gas production will not only lower energy bills but also create thousands of good-paying American jobs.” This links energy strategy directly to job creation and economic activity.
3. SDG 9: Industry, Innovation, and Infrastructure
   • The text discusses the significant investment required for new energy infrastructure, including “wind turbines, solar farms, grid-scale battery storage, and electric vehicle charging stations.” It also raises concerns about grid reliability (“ensuring the grid can handle the load”), which is a key aspect of SDG 9’s focus on resilient infrastructure.
4. SDG 12: Responsible Consumption and Production
   • The article critiques government subsidies influencing energy production, specifically mentioning “massive Inflation Reduction Act subsidies” and the call to remove “taxpayer handouts for ineffective green initiatives.” This relates to the goal of rationalizing subsidies to encourage more sustainable production patterns.
5. SDG 13: Climate Action
   • Although the article critiques the methods, it is framed as a response to climate-focused policies. It explicitly mentions “Federal emissions rules” and an “aggressive push for green energy,” which are measures taken to combat climate change. The article’s argument is about the economic consequences of these climate actions.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 7 (Affordable and Clean Energy):
   • Target 7.1: By 2030, ensure universal access to affordable, reliable and modern energy services. The article directly addresses the “affordable” aspect by highlighting the rising cost of electricity for consumers.
   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article discusses the policy-driven “transition away from fossil fuels” to renewable sources like wind and solar.
   • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure. The article discusses massive investments in new infrastructure (“wind turbines, solar farms”) driven by policy.
2. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.5: By 2030, achieve full and productive employment and decent work for all. The article suggests that a specific energy policy (investing in domestic oil and gas) will “create thousands of good-paying American jobs.”
3. Under SDG 9 (Industry, Innovation, and Infrastructure):
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being. The article questions the reliability of the current energy transition, mentioning the need to ensure the “grid can handle the load” from EVs and the “forced early retirements of coal and natural gas plants that still work.”
   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable. The article discusses the forced upgrading of energy infrastructure to green technologies but questions its economic sustainability from the consumer’s perspective.
4. Under SDG 12 (Responsible Consumption and Production):
   • Target 12.c: Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption. While the article advocates for fossil fuels, it directly engages with the concept of energy subsidies by criticizing “massive Inflation Reduction Act subsidies” for green energy and calling for the removal of “taxpayer handouts.”
5. Under SDG 13 (Climate Action):
   • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article is a critique of the implementation of this very target, referencing “Federal emissions rules, renewable energy targets,” and the “Biden administration’s green energy agenda” as national policies.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For Target 7.1 (Affordable Energy):
   • Indicator: The price of electricity for consumers. The article provides a specific metric: “U.S. residential electricity rates jumped over 26% in the past five years.” This serves as a direct indicator of affordability.
2. For Target 7.2 (Share of Renewable Energy):
   • Indicator: The share of different energy sources in the energy mix. This is implied through the discussion of “forced early retirements of coal and natural gas plants” and the mandated shift to “wind and solar.”
   • Indicator: The existence and enforcement of “renewable energy targets” and “green energy quotas” are policy-level indicators of the push towards this target.
3. For Target 8.5 (Decent Work):
   • Indicator: Number of jobs created in the energy sector. The article implies this indicator by stating that investments in oil and gas will “create thousands of good-paying American jobs.”
4. For Target 12.c (Subsidies):
   • Indicator: Amount of government subsidies for energy production. The article explicitly mentions “massive Inflation Reduction Act subsidies” as a key policy driver, making the value of these subsidies a relevant indicator.

4. Summary Table of SDGs, Targets, and Indicators

Source: americansforprosperity.org