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Sen. Alexander’s “Four Grand Principles” Don’t Appear to Add Up

Posted By Lowell F. on June 4th, 2013

The Hill reports:

Sen. Lamar Alexander (R-Tenn.) proposed “four grand principles” to guide the United States toward clean energy independence.

“We will likely have a cheap sustainable supply of energy if we let the free market work,” Alexander said in a floor speech Monday. “Cheaper and more reliable energy is in our grasp.”

Alexander said four basic principles could help “guide” the future of U.S. energy. He suggested that the United States promote cheaper not more expensive energy, such as natural gas, use clean not just renewable energy, such as nuclear, have research and development not government mandates, and allow the free market not government to pick winners and losers in the energy sector.

Some of that may sound good on the surface, but the devil’s in the details.  For instance, in terms of “picking winners and losers in the energy sector,” we know that the government’s been doing just that for decades – overwhelmingly in favor of the fossil fuel industries. We also know that fossil fuels have access to financing vehicles, like Master Limited Partnerships, which provide them with yet another unfair,  non-free-market advantage over clean energy. Finally, we know that fossil fuels are allowed to pollute the air and water without paying the true, fully internalized cost of that pollution. In economics, that’s known as a classic example of “market failure.”

Given all these examples of how, when it comes to the U.S. energy sector, we have anything but a “free market,” the question for Sen. Alexander is simple: Will he support the complete elimination of fossil fuel subsidies, tax breaks, and other subsidies to dirty energy? In addition, we wonder if Sen. Alexander will agree that fossil fuels should pay the pollution cleanup costs which we now shoulder. If not, it’s difficult if not impossible to understand how Sen. Alexander’s “grand principles” amount to any change in the skewed-towards-fossil-fuels status quo.

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Yet Another Example of Taxpayer-Funded Corporate Welfare, This Time on GM Crops

Posted By Lowell F. on May 16th, 2013

According to Raw Story:

American diplomats lobbied aggressively overseas to promote genetically modified (GM) food crops such as soy beans, an analysis of official cable traffic revealed on Tuesday.

The review of more than 900 diplomatic cables by the campaign group Food and Water Watch showed a carefully crafted campaign to break down resistance to GM products in Europe and other countries, and so help promote the bottom line of big American agricultural businesses.

[...]

The report offers a further glimpse of the power of the agricultural and biotech industries in America, after the supreme court came down on the side of Monsanto in its effort to enforce its patented GM soybeans.

This is yet another example of taxpayer-funded corporate welfare run amok.  Couldn’t Monsanto - which recently announced quarterly profits of $1.48 billion – have spoken for itself in Europe? On a related note, didn’t our public servants have something better to do with their time – and our money – than to promote the interests of this super-wealthy corporation? Inquiring minds would love to know, but we suspect we know the answer: just as with the fossil fuel industry, these powerful corporations generally get what they want from the government, while the rest of us pay the price for it.

Posted in Government, subsidies
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Experts on Fossil Fuel Subsidies Agree: We Need to Eliminate Them As Rapidly as Possible

Posted By Lowell F. on April 10th, 2013

Earlier today, I was on a conference call with leading world experts on fossil fuel subsidies, an issue we’ve written a lot about here at Scaling Green. I thought it would be worth reviewing the key points made.

First, the scope of fossil fuel subsidies worldwide, and specifically here in the United States, is enormous. They include tax breaks and loopholes, price controls, loans to fossil fuel firms at favorable rates, exemptions from environmental laws, direct payments, and consumption-side programs to lower the price of gasoline at the pump. All in all, these subsidies – on the producer and consumer side – add up to a great deal of money. How much? It’s not really known for sure, but we’re talking about upwards of several hundred billions of dollars per year on the production side, ditto on the consumption side, and probably well more than $1 trillion per year (according to a recent IMF report) in governments shouldering the health care and other “social costs” of fossil fuel pollution. All told, we’re talking trillions of dollars per year in fossil fuel subsidies worldwide. That’s a lot of money by any standard.

What should be done about these fossil fuel subsidies? The experts agreed that they should be eliminated as rapidly as possible, as they are wasteful, expensive, and environmentally destructive, among other problems. To date, unfortunately, in spite of commitments – by groups like the G20 and G8 – to do just that, there has been very little if any real movement in that direction.

Making the matter even more galling, at the same time that these fossil fuel companies are receiving enormous, taxpayer-funded corporate welfare, they’re also making record profits in the history of mankind. They’re then using some of these profits to buy off politicians and to spread disinformation (via “think tanks” and the media) about clean energy. That disinformation campaign includes the usual litany about how government “shouldn’t be picking winners and losers,” even as the government has done just that for over a century now, heavily subsidizing fossil fuels. It also includes the canard that only clean energy gets subsidies, when in fact fossil fuels have received – and continue to receive – orders of magnitude greater subsidies than renewable energy does.

Fortunately, we have a great deal going for us on the side of renewable energy: overwhelming popular support, rapidly falling costs and expanding production for solar modules and wind turbines, clean energy job creation, and examples almost every day of how fossil fuels are polluting the environment and harming public health. That’s all great material we can and should be using in communicating the facts to the public, so that they can come to an informed decision about which energy path to follow. Clearly, that path involves a rapid transition from dirty to clean energy, for a large number of compelling reasons. As one expert on the call put it, “if you’re in a hole, stop digging and move in the right direction.” We couldn’t agree more that fossil fuels have put us in a “hole,” and that renewable energy will get us out of it. Let’s get moving.

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And the Taxpayer-Funded Fossil Fuel Welfare Train Chugs Along…

Posted By Lowell F. on April 3rd, 2013

In our continuing series on wasteful subsidies to dirty energy companies, here’s yet another one.

Mississippi Power Co, the smallest utility of giant Southern Co, withdrew its request for a $1.5 federal billion loan guarantee for a controversial clean-coal project just days after state regulators approved an agreement giving the utility a new avenue to cover rising costs for the project.

A Southern Co spokesman said Mississippi Power dropped a plan to seek a loan guarantee from the U.S. Department of Energy for its Kemper County coal project in late January after determining it could find lower-cost financing than what it expected the government program to offer.

[..]

Meanwhile, Southern Co remains “cautiously optimistic” it can negotiate favorable terms to obtain its share of an $8.3 billion DOE loan guarantee for the $15 billion two-reactor expansion at the Vogtle nuclear station in Georgia.

And on and on it goes. The real question, of course, should be: why do companies like the “giant” Southern Co. need taxpayer-funded corporate welfare at all? If “clean-coal” plants, or other fossil-fired power facilities, make so much sense economically, shouldn’t they be able to compete on a level playing field with alternatives, like solar and wind, without massive subsidies? Apparently not.

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Washington Post: “Every country in the world would benefit from the honest pricing of energy”

Posted By Lowell F. on April 1st, 2013

Halt the pixels — the Washington Post editorial page talks forcefully about dirty energy welfare!

Despite the popularity of many energy-subsidy schemes, the net result is a big drag on world prosperity. Government policies that make prices artificially low encourage people to use too much energy, resulting in pollution that dirties local environments, congested streets and global warming. At the same time, subsidies distort investment; instead of allowing capital to flow to where it would do the most good, they push it toward fossil-fuel production — and away from enterprises that would more usefully employ some of the money, such as clean energy. Supports also hurt government budgets by diverting resources away from worthier state spending. And they disproportionately benefit the wealthy.

Every country in the world would benefit from the honest pricing of energy

Of course, we’ve been saying all this for a long time. Still, we’re pleasantly surprised to see the Washington Post editorial board getting on board. Progress, however small…

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