Your taxes are keeping the fossil fuel industry afloat; let’s subsidize solar instead

Compared to the GOP debates, the first Democratic debate got the Democratic party smiling. Not just because of this awesome wizard, but because the Democratic candidates came out competent and addressed their voter’s concerns, like climate policy. The front runners addressed climate policy in their own ways whether it was on moral terms, economic terms, or with Clinton citing the strides the White House is making worldwide.

Associated Press

Current legislation, like the Federal Government’s Clean Power Plan, is on the table to address the American people’s concerns over pollution emitted from our factories, but it is not just the U.S. government and the democratic party at the forefront to address climate change.

Recently, the Pope released an encyclical that “calls for a new partnership between science and religion to combat human-driven climate change.”

Recently, the Pope released an encyclical that “calls for a new partnership between science and religion to combat human-driven climate change.” But, despite a clear message from the Vatican, NASA scientists, and the White House, there is still overwhelming governmental financial support of the fossil fuel industry that comes in many different forms called subsidies. The government, quite literally, gives money or aid to the multi-billion dollar fossil fuel industry to do business. These subsidies can be found in local political legislation all the way up to national political policies. But, despite the declining rate in which fossil fuel extraction is providing sustainable jobs in industries like coal, the negative impacts extraction and consumption of fossil fuels has, and the insane amount of profit the industry sustains in the U.S. and Canada (which is larger than many countries and probably means they do not need the hand outs from the local or state governments), subsidies support the fossil fuel industry, heavily, as compared to the burgeoning solar industry.

Photo: GARY TRAMONTINA/BLOOMBERG NEWS

Government can work to create motions that require the nation, or cities, or districts to adhere to certain policies, as long as they are constitutional. Voters get to vote on some bills and issues, but most bills and issues are voted on by politicians. These elected officials can vote to provide subsidies to energy industries like oil, gas, and even clean energy.

Here’s an interesting story about providing oil and gas subsidies: http://www.theguardian.com/environment/2015/may/12/us-taxpayers-subsidising-worlds-biggest-fossil-fuel-companies

This means taxpayer money is used to offset the price for fossil fuel companies to do business. For example, if it costs $1 million to build a fracking rig in Louisiana, ExxonMobil will tell the Louisiana government they want to build a plant in their state, but it costs too much. In order to do business, they want money from the government or tax breaks to bring their fracking jobs to the people. Louisiana will then prop them up by giving them a tax break, which means they do not have to contribute to the state like an average person or company does. Or, they will subsidize the building of the power plant by giving them tax payer money to build or maintain that plant, thus making the $1 million cost drop to whatever is negotiated. In real life, ExxonMobil made $41 billion in profits in 2011 and they also received $119 million of taxpayer money from the state of Louisiana to upgrade their refinery on top of their profits.

At the same time, subsidies can and should be used for the Average Joe who already pays the taxes that provide subsidies. Currently, there is a federal subsidy for solar that covers the total cost of a solar installation for every day people up to 30%. This can effectively push the short-term cost of installing solar well below the long-term cost of using current energy providers that use coal, natural gas or liquid petroleum. It also feeds energy to those around them and pushes their neighbor’s cost and fossil fuel use down. Plainly speaking, every taxpayer in the U.S. pays a little bit to every solar installer to put up solar panels on their house. In return, these people who use solar keep their energy cost down and they push down the cost of energy for everyone around them. Your taxes pay to put solar panels up, then in return, your energy costs go down.

For fiscal year 2013, the U.S. had given out $29.3 billion in direct federal financial interventions and subsidies in all electric energy markets. Solar counted as $5 billion of those subsidies in 2013, while coal, natural gas, and petroleum liquids took up a lesser amount, close to $3.5 billion, for 2013. This is a clear shift in values since 2010 when coal, natural gas, and petroleum liquids received a little over $4 billion in subsidies and solar maintained a little over a paltry $1 billion in federal assistance. Adding together the two years, oil, natural gas, and petroleum tops the two by $1.5 billion, but in terms of recent subsidizing, the U.S. seems to be moving in the direction of renewable solar energy. Which sounds great, but…

Source: EIA, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2013 Note: LIHEAP is the Low Income Home Energy Assistance Program.

But, those subsidies do not take into account subsidies around the world and the barriers currently preventing a fair U.S. market. In a 2014 interview, SolarCity’s CEO pointed out,

“The fossil fuel industry’s advantage doesn’t just exist in tax deduction and government handouts. Section 105.2 of the Uniform Building Code, for example, exempts oil derricks from the building permit requirement…It’s faster to get a permit for a fracking facility than it is for a solar system [in San Diego].”

© Bettmann/Corbis

In an article by Samuel Oakford published by the Inter Press Service News Agency, he wrote,

“Though definitions vary, in 2013 the IMF found that when ‘post-tax’ externalities like carbon emissions, effects on health and resource scarcity were considered, global subsidies of fossil fuels rose to ‘$1.9 trillion worldwide — the equivalent of 2.5 percent of global GDP, or 8 percent of government revenues.’ Estimates for renewable subsidies top out at a comparably measly 88 billion dollars globally.”

(Carolyn Cole / Los Angeles Times / June 4, 2010)
“30 percent of childhood asthma is due to environmental exposures, costing the nation $2 billion per year,”

While it seems, by the recent study done by the U.S. Energy Information Administration, the U.S. is moving in the right direction toward solar energy subsidies, it fails to recognize that poor policy and the harmful effects on the environment further subsidizes the fossil fuel industry by not only creating barriers to entry for clean energy like solar, but it is also giving them freedom to create an increased financial burden on the taxpayer without consequence to their industry. “30 percent of childhood asthma is due to environmental exposures, costing the nation $2 billion per year,” and polluters are not covering any of the healthcare costs created directly from their pollution.

Getty Images

Acting under the assumption that many of the harmful affects of climate change is caused by the emitted CO2 from the fossil fuel industry, and add in the abstract subsidy of political barriers to entry, plus the initial subsidies granted by the U.S. to coal, natural gas, and petroleum liquids, the $6.5 billion they had received in 2010 and 2013 does not represent the additional costs of damage to their surroundings and the preferential political policies developed over the years.

Marathon Petroleum refinery in Canton, Ohio, got a job subsidy scheme worth $78m when it started in 2011. Photograph: PR

At the end of 2016, the federal subsidy given to regular people and businesses who install solar systems on their own property will drop from 30% to 10%. Despite the amount of probable damage the fossil fuel industry has done, despite the unprecedented trillions of dollars they receive globally, the economic playing field will continue to tip in favor of dirty energy. As Samuel Oakford quotes,

“’If you can remove fossil fuel subsidies, then renewables are the clear choice, they are far cheaper in the long run,’ said Philipp Tagwerker, research fellow at the Worldwatch Institute and author of a recent report tallying subsidies. ‘Renewables are competitive at the moment, but it takes political will to change.’”

That political will comes from politicians who are willing to support legislation that favors clean energy like solar. Those politicians are not voted in by industries; people vote them in. Big name politicians are recognizing the call and need for renewables, and it will be voters that get the final say. Remember to vote for the politicians that support clean energy, because it is your tax dollars that will go to the industries they choose.