Saturday, May 1, 2021

Ending the Subsidies to Fossil Fuel

There has been an unholy alliance between the fossil fuel driven energy sector – and that most definitely includes the automotive industry – and the government. The wink-wink handshake deal has included tax loopholes, unique and rather huge tax deductions, direct “failure” guarantees, exemption from common sense financial responsibility for clearly direct and measurable environmental damage and shelter from pollution regulation. 

There has been an unholy alliance between the fossil fuel driven energy sector – and that most definitely includes the automotive industry – and the government. The wink-wink handshake deal has included tax loopholes, unique and rather huge tax deductions, direct “failure” guarantees, exemption from common sense financial responsibility for clearly direct and measurable environmental damage and shelter from pollution regulation. 

The arguments to maintain these taxpay subsidies, even as billionaires profit the most, generally revolve against job loss and the cost for a changeover. Billionaires, particularly in red states with fossil fuel economies, tend to make the biggest campaign contributions and pay for those massive media campaigns to convince blue collar workers to oppose a most necessary phasing out of old world and highly destructive traditional carbon-based energy production. Even though it is clear that not only can we replace lost blue-collar jobs in this movement towards green alternative energy but actually grow the overall employment base well beyond its current state in the world of fossil fuel energy extraction and generation.

Today the words “energy independence” are still not used to support green renewables as much as they are used to encourage the fuller exploitation of our fossil fuel reserves. Those arguments have been made for decades. Funny, it we had accepted the inevitable when it first became obvious, that transition would almost be over by now. Instead, we are not that far from where we were decades ago, a few steps forward, a few Trump steps back, but nowhere near where we should be to counter the most destructive force humanity has ever known. Unlike disease-driven pandemics, which can be contained, and which phase out over time, the damage from climate change aggregates, accelerates, intensifies, disrupts and destroys seemingly without any vision of a satisfactory end.

With Republicans in Congress vowed to oppose Biden’s policies wherever they can, with a particularly diabolical focus against any proposals to shift out of fossil fuel, make corporate America actually pay for the damage they cause, and to shift out of a heavily focused form of what can only be described as corporate socialism. These pro-fossil fuel practices are labeled as “pro-business” and supportive of “capitalism”… a “free market.” But an industry that has its own specialized rules that provide governmental economic benefits that are only accorded to a preferential corporate few is by its own definition not a “free market.” The GOP hypocritically labels this government handouts and safety nets to this energy sector as capitalism but safety nets for disadvantaged ordinary Americans as socialism (which, even under the most basic dictionary definition, it is not).

Former Labor Secretary Robert Reich, writing an OpEd for the Guardian UK (April 18th) notes: “When industrial policy was last debated, in the 1980s, critics recoiled from government ‘picking winners.’ But times have changed. Devastating climate change, a deadly pandemic and the rise of China as a technological powerhouse require an active government pushing the private sector to achieve public purposes.

“The dirty little secret is that the US already has an industrial policy, but one that’s focused on pumping up profits with industry-specific subsidies, tax loopholes and credits, bailouts and tariffs. The practical choice isn’t whether to have an industrial policy but whether it meets society’s needs or those of politically powerful industries.

“Consider energy. The fossil fuel industry has accumulated ‘billions of dollars in subsidies, loopholes and special foreign tax credits,’ in Biden’s words. He intends to eliminate these and shift to non-carbon energy by strengthening the nation’s electrical grid, creating a new ‘clean electricity standard’ that will force utilities to end carbon emissions by 2035 and providing research support and tax credits for clean energy… It’s a sensible 180-degree shift of industrial policy… The old industrial policy for the automobile industry consisted largely of bailouts – of Chrysler in 1979 and General Motors and Chrysler in 2008.

“Biden intends to shift away from gas-powered cars entirely and invest $174bn in companies making electric vehicles. He’ll also create 500,000 new charging stations… This also makes sense. Notwithstanding the success of Tesla, which received $2.44bn in government subsidies before becoming profitable, the switch to electric vehicles still needs pump priming.” There are obvious as well as hidden consequences.

We are discovering that beyond the increasing unaffordability of job rich urban centers, the recent exodus from cities to other regions is also being triggered by this harmful ecological realty: urban air pollution. China is seeing this happening with particular frequency. So are we. Economics Professor Ahmed Mushfiq Mobarak summarized (Yale Insights, April 13th) a recent Yale University by School of Management study: “They found that, indeed, people tended to flee from polluted cities—but this trend was much more pronounced among skilled, educated employees. Those individuals were leaving places where there was already a scarcity of skilled workers, and relocating to places where they were more skilled people, making their presence a little less useful—causing aggregate productivity to drop. Further, since they leave behind a shortage of skilled labor to manage and train unskilled colleagues, productivity drops further in the places they escape.” 

Rising younger American voters place getting real with climate change as their number one priority. Within their relatively young lives, they have already witnessed a massive increase in hurricane intensity and frequency, wildfires, drought, coastal erosion and flooding within the continental United States. Recent polls tell us that a majority of Americans believe the time for serious prioritization and addressing the containment of climate change is immediate. 

The continued mainstream GOP denial or marginalization of the severity of climate change devastation, mirroring that same denial and marginalization of the COVID threat before it killed well over half a million Americans and infected millions of others, tell us that the Republican Party is not only on the wrong side of history but that it is alienating rising generations of voters and make a very bad problem so much worse. Planting the seeds of its own demise. Nature will not relent because it faces political denial! Humanity cannot vote climate change away.

I’m Peter Dekom, and it is time to unify Americans against nature’s apolitical wrath that we must now call a climate change “emergency.”


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