ISSUE:Energy & Environment
It’s time to bring liberty, growth, and opportunity into our energy and environmental policy.
Climate change has the potential to redraw our coast lines, burden our agriculture industry with heat waves and draught, and triple the frequency and severity of extreme weather events. The greenhouse gases pumped into the atmosphere by burning fossil fuels have lasting effects on our planet that can shape our lives and economy in a way that no one wants.
How can we modernize our infrastructure to cut down emissions, without spending money we don’t have? Here are the problems with how we currently deal with energy, and my revenue neutral solutions to start fixing them.
We are subsidizing fossil fuels
|It’s not a joke, an industry with two of its companies in Forbes’ top ten most profitable corporations is getting subsidized by you, the tax payer, to the tune of $6 billion a year. Take a look at the activities we give them money for:|
|“Cost Depletion”- we pay them to extract resources from the ground||$1.7 Billion|
|“Expensing of exploration and development costs”- we pay them to go look for more oil and gas||$1.1 Billion|
|“Amortization of costs of air pollution facilities”- we pay them to take care of the pollution they create||$400 Million|
|“Credit for investment in ‘clean coal’ facilities”- we pay them for a something that was deemed economically impossible a decade ago||$200 Million|
|“15 year depreciation for natural gas distribution lines”- we pay them to move their product once it’s out of the ground||$200 Million|
|“Amortization of expenditures associated with oil and gas exploration”- we pay them to borrow money to go look for more gas||$100 Million|
|“Electricity transmission”- we pay for private companies to build and maintain power lines||$700 Million|
|“Biodiesel and renewable diesel credits”- we pay for ethanol production with virtually no return on investment||$1.7 Billion|
Your tax money is being shoveled into a power plant and burned to generate not just power, but higher profit margins for the fossil fuel industry.
These expenditures first began in the 1930s when the U.S. was building up its energy infrastructure, but when an industry achieves record breaking profits every year, it’s time to push it out of the nest.
The United States should not be in the business of doling out special grants or tax breaks to any company, least of all one that’s caused 16 oil spills in 2017 alone, yet we are paying anywhere from $90 to $200 on top of each barrel of American oil just to increase domestic production. This could be the most expensive possible way of achieving “energy independence” there is, and still leaves us importing half of our fuel.
The same goes for renewable energy companies. With the exception of access to a research and development fund, these companies should never be allowed the luxury of having their costs paid by the tax payer.
Currently we spend $4.1 billion on tax credits for green energy companies. These are companies that build miles and miles of 20 story high wind turbines and large scale solar farms. They sell their power to consumers or other providers and continuously profit off of the machines we help them build.
But the best thing about renewably sourced power is that there’s no ongoing extraction; once you build put up the equipment, the power generation is automatic. With a solar array on your roof and a small wind system in your backyard, your home becomes a small-scale power plant, which makes paying a company to bring the power to you obsolete.
We can also channel the $6 Billion a year currently spent on oil and gas into research and development for more efficient technology, and additional funding for solar and wind tax credits. Take a look at how the new funding structure would look:
Department of Energy Budget
(Based on 2015 CBO numbers)
New DOE Budget
While we will likely still need some sort of supplementary power supply for when weather doesn’t allow for generation in certain areas, this would achieve an unprecedented level of energy independence.
The average American pays $114.03 a month (EIA) on electricity, or 1,368.36. Even having 60% energy independence would put another $821 into peoples’ budgets each year, which they could use to get out of debt, save, or spend on goods and services. Multiply these numbers across 130,000,000 energy consumers, and there is over a trillion dollars of growth potential for our economy.
Non-renewables come with hidden costs
Fossil fuels create negative externalities that we pay for long after the gallon of gas or lump of coal is burned. If entire neighborhoods in Miami Beach have to be jacked up to avoid flooding from sea level rise, or a serious draught causes low crop yields in a given year, the cost will ultimately be borne by us, the taxpayers. These effects are what economists call social costs. If these delayed costs were included in the price of fossil fuels, they’d become much less attractive to use.
(per the EPA’s estimated social cost of carbon)
This price per ton would increase by a set amount each year along with the social cost of emissions.
Recognizing the regressivity of an emissions tax, some revenue would be allocated back to the public through income tax credits, available for those making up to $91,900.00 a year.
Internalizing this external cost will serve two purposes:
- Start funding infrastructure adjustments and health costs associated with climate change and,
“Nudging” the market to expedite its transition to clean energy alternatives to avoid the tax penalties of polluting
Help to build climate compacts among regions
Residents of any given area of the U.S. know how intensifying climate affects them more than anyone else. In a particularly climate sensitive region, Southeast Florida, municipal governments have come together to form what they’ve called a climate compact, a joint partnership to take initiatives on various aspects of climate change in a unified front.