Phasing Out Our Fossil Fuel Pork
Energy subsidies aren't necessarily bad. What the new Congress needs to decide though are which energy sources we actually benefit from favoring.
The International Energy Agency’s latest World Energy Outlook says it’s time to put the kibosh on fossil fuel subsidies, which totaled $312 billion worldwide in 2009, mostly in developing countries.
Closing down the buffet would knock down worldwide oil demand by 5 percent, the IEA estimates, a quantity equivalent to one-fourth of daily U.S. consumption.
Derailing the gravy train also would yield an estimated 40 percent of the CO2 emissions reductions necessary to be on track towards cuts that would hold global temperature increases to 3.6 degrees F, the boundary that scientists have judged is necessary for keeping the global climate system out of the red zone.
The IEA says dumping fossil subsidies would be “ambitious.”
No doubt. The politics are treacherous everywhere. In this country, debates about energy subsidies typically play out as follows:
“You’re subsidized!”
“No, you’re subsidized!”
It goes downhill from there into a contest between logrolling special interests. The cumulative result is a mishmash of tax preferences, payments, loan guarantees, royalty relief, and other forms of largesse that have a spotty relationship to long-term goals like energy security and economic development.
The argument between energy pots and kettles overlooks the obvious.
Every energy source is subsidized. Efficiency, renewables, nukes, fossils – not one of them is a subsidy virgin, a chaste player in a Tea Party dream market free of government favors.
Quick digression into a fun but relevant anecdote. At a solar energy fair last summer where I staffed an information table, a guy came up to me and said energy choices should be left to the free market. I replied that when the U.S. has a free market in energy, I’d let him know. He didn’t like that answer.
Energy subsidies are not necessarily bad. The critical questions, however, are not which energy sources should get government favors and how much, but what energy policy goals are we trying to achieve and what, if any, subsidies make sense for achieving them.
Do we want more security from the kooks and potentates that can roil the world oil market and drive up prices?
Should we scale up basic energy research – yes, that’s a subsidy, too – to examine high-risk, high-potential energy technologies over the horizon that could be the basis for new industries and dramatic pollution reductions?
Is it worth buying some insurance, on the reasonable chance that climate change is not a hoax masterminded by megalomaniacal scientists seeking world domination?
Those are several of the critical questions that should be the sideboards around energy subsidy debates.
Will the 112th Congress have such a debate? In the IEA’s words, such a hope would be “ambitious.”