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Business And Economics

Business And Economics Free Essay

U.S. Energy Policy

Introduction

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The energy policy of the United States is determined by the state, federal and local governing bodies in the country. The policy addresses the issues of production, distribution, and consumption of energy such as the gas mileage standards and building codes. In addition, it includes international treaties, legislation, incentives and investment subsidies, as well as taxation, guidelines for the conservation of energy and other aspects of the public policy. There are a number of mandates that have been proposed over the past decades. For instance, the following decisions such as gasoline should not go beyond $ 1 gallon and the US will never import oil as it happened in the year 1977 are among the most significant policy decisions of the US government. However, there has never been a proposal of a long-term energy policy, which, in fact, has raises many concerns (“U.S. Energy Policy” 43). This paper is going to discuss the current United States energy policy concentrating on its positive and negative sides.

There have been many discussions concerning the US energy approach such as the natural gas policy, oil policy, nuclear power policy, coal policy, a hydroelectric policy, solar power policy, renewable energy policy, and the wind power policy. Moreover, there exists Obama Clean Energy Plan, which focuses on reducing the consumption of oil, coal, and gasoline. The administration of the president claims that the program aims at minimizing the hydrocarbon emissions to the atmosphere thus eventually reducing the effects that are associated with global warming (“U.S. Energy Policy” 43).   However, of concern is the fact that the government would spend much of the taxpayers’ money on the policy’s implementation. It may eventually lead to the burden of a national debt since the country will be forced to borrow funds to sustain its society due to large financial investments in the initiatives of the green energy policy (“U.S. Energy Policy” 43).

Although the policy is aimed at reducing the consumption of oil, coal and gasoline, the dilemma is how people are going to heat their houses? Therefore, it is important for the government to put such issues into consideration before it provides a viable decision. It has also been discovered that the green energy policy has a political motive behind. It is considered that in such a way, the government tries to gain control over every aspect of the people’s lives through emphasizing the benefits of the policy to make them support the idea.

Nevertheless, the energy policy has led to the improvement of energy efficiency, which is crucial for the creation of jobs and development of the economy. More so, it will help the citizens to use less to allow catering for the  energy needs of the industries, cars, offices and homes (“U.S. Energy Policy” 43).

The benefits of energy efficiency include saving energy and helping families to economize on some utility bills that they have to pay, as well as giving them the opportunity to control the use of energy. It also enables businesses to become more competitive as they will be using less money on their operating needs thus the possibility of increased revenue and a better position of creating jobs. Energy efficiencies also lead to the reduction of pollution, which will positively affect the people’s health. It is also evident that the energy policy is conducive to the reliability, abundance and affordability of energy. It is not focused on manipulating or managing the markets of energy on setting up the primary parameters that will allow the free market to work in the manner that is desired. Firms like ExxonMobil will assist in leading an economic improvement with investments in new technologies, projects and jobs that will pave the way for renewable energy in the economy of the United States (“U.S. Energy Policy” 43).

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However, in 2010, the natural gas and oil industry brought 476 billion dollars to the economy of the United States.  This figure is three times higher than the economy of the nation has ever earned. Moreover, the industry has led to job creation opportunities, which is a significant boost to the economy. Employed people are able to contribute to the taxes paid thus increasing the government revenue (Geri and MacNabb 67). It is also evident that in 2011, direct employment in the oil industry went above 2.5 million. Obama’s green energy plan is to increase the prices of the fossil fuels so that renewable energy can also be competitive economically. It should be noted that the citizens of America are facing financial difficulties due to the food prices that are rising as well as the increasing energy costs. More so, the low-income social classes such as the Hispanic and African-American households are forced to spend a large part of their income on energy bills, and the policy will help them to use renewable energy, which is cheap and affordable rather than consuming the expensive fossil fuel. Therefore, it is evident that the policy is a contributor to the economic burden, but in the end, people will start to see and feel its benefits in their daily lives (Geri and MacNabb 67).

Among the disadvantages of the Clean Energy policy is that it is a control-and-command approach, which allows the federal government to be actively involved in selecting the winners and the losers thus making the prices for energy go up while driving jobs overseas and stagnating the growth of the economy. The winners of the policy are the well-established organizations and social elite while the losers are common hardworking American citizens. Besides, it is also  regarded by some just as a transfer of wealth from the lower and middle-class citizens to the rich investors who want to make profits from the renewable energy. It is commonly known that coal is very cheap and provides nearly half of the country’s electricity, and thus, there is no reason why it should be made expensive. Moreover, many people depend on it to meet their energy needs, and raising its costs will significantly harm the American citizens’ budgets (Geri and MacNabb 67).

It should also be emphasized that the United States has more natural resources as compared to any other nation, and thus, the country needs a new energy policy that enhances domestic development to put it in a position of lowering costs, becoming more independent and growing economically. At the same time, an efficient energy policy will ensure that there is a sustainable development (Geri and MacNabb 67). Considering the fact that people, at the current stage of technological advancement, they can introduce alternative energy sources to meet the needs of today without compromising the future of coming generations. The policy encourages people to use renewable sources of energy that will ensure that there will be a sustainable progress in various spheres of life. However, if they continue to use the foil fuels then the greenhouse gas emissions will automatically lead to a universal change of climate putting at risk the future of the generations to come (Geri and MacNabb 67).

Moreover, Clean Energy Policy aims at educating people on the drawbacks and dangers of using nuclear energy. It was found that nuclear power entails the production of radioactive nuclides, which cannot be eliminated from the biosphere throughout the whole process of fuel circulation. It is also evident that losses that are dissipative usually contribute to the emission of large quantities of these substances, which further are integrated into the natural environment causing an increase in the radiation levels on the entire planet. In the long run, the future generations will have a serious problem to deal with (Grossman 76).

Although the policy promotes a diversity of energy resources, it undermines certain others that are limited in supply and are subject to price volatility. It is also clear that coal mining has allowed for job opportunities in the United States at the same time enabling businesses to remain competitive. Therefore, if the new energy policy puts measures to reduce its consumption, many people might lose their jobs, and the companies will incur significant losses (Grossman 76).

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The policy will also distort energy market due to the fact that considering options of higher cost energy will slow down the growth of the economy. In addition, if people are forced to switch from one fuel to another, this might result in higher costs and raise the unemployment level, which is is a clear indication of a negative effect on the country’s economy of the country. The budget significantly depends on the income generated from the collection of taxes, and with increased unemployment rates there will be additional spending on the socially unprotected strata of the population and reduced income obtained from the taxes since more people would become jobless. Therefore, instead of increasing the prices for fossil fuels such as coal, the government should deploy advanced technologies that have the capacity of improving the environmental performance of the coal-based generation (Grossman 76). Since 1970, the consumption of coal has gone up by more than 70 percent, and due to the use of innovative technology, the pollution caused by energy production using coal as its main source has reduced by 40 percent (Grossman 76). Thus, if the government continues to support the implementation of technology as well as its active advancement, then, beyond a reasonable doubt, the pollution rates will continue to reduce. The administration of the president who came up with the Clean Energy Policy should ensure that the supply of the resources needed for the delivery of affordable domestic energy is stable and reliable. Besides, with this agenda achieved, people will be able to consume the renewable energy and thus be in a better position of saving the money they used to spend on the consumption of the fossil fuel. Businesses will also require these sources such as metals, for example, to be able to use the renewable energy that the policy is advocating for (Grossman 76).

From the analysis above, it is clear that the United States requires an energy policy that will manage to recognize the primary role that the appropriate handling of the energy issue plays in ensuring the economic well-being of the American households and businesses that operate within the country. An effective policy must also provide the strategies that will help the citizens and businesses to easily access the renewable sources of energy. If the strategies are not be properly implemented, the country risks not only to allow for the transfer of wealth to other nations but also a decrease of  the living standards of its citizens, which will be forced to go down due to the economic problems suffered by the state (Hudson and Jorgenson 89).  Nevertheless, the general perspective on Obama Clean Energy Policy indicates a promising sustainable development that will greatly benefit the coming generation by ensuring the reduction of harmful substances emission to a great extent.  The policy has also ensured that low-income households can consume energy without much spending through the use of the renewable sources thus being able to use the money they economize on refusal from the fossil fuel to develop their lives (Bin and Dowlatabadi 47).

Conclusion

The paper has discussed the United States energy policy focusing on its positive and adverse aspects. Thus, Obama Clean Energy Policy advocates the reduction of oil, coal and gasoline consumption. Also, it aims at minimizing the hydrocarbon emissions to the atmosphere and thus eventually reducing the effects that are associated with global warming. However, some people argue that the policy is that of control and command, where the government is involved in selecting the winners and the losers through making the prices for energy increase while driving jobs overseas and pulling back the growth of the economy. It is also argued that instead of increasing the prices of fossil fuel such as coal it should deploy advanced technologies that have the capacity of improving the environmental performance of the coal-based generation. Therefore, it is clear that the US energy policy is a subject that is debatable. Moreover, it bears both positive and negative effects and implication within it, affecting the well-being and daily lives of the citizens of the United States. The drawbacks as well as the benefits of the approach being introduced by the current government have been discussed in the paper. Finally, it should be emphasized that it is the responsibility of the government to ensure that it comes up with energy policies that pave way for sustainable development of the country and for the benefit of its people and the environment in general.

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