MCViewPoint

Opinion from a Libertarian ViewPoint

Erie Times E-Edition Article-Fossil fuel subsidies don’t pay off for Pennsylvanians

Posted by M. C. on February 26, 2021

Government shouldn’t subsidize anyone. Government messes up most everything it touches.

If consumers aren’t happy with price, product or delivery of anything the consumer should be free to go somewhere else, stimulating providers to either develop something new and better or fix what they have.

That is called free market.

Did I mention government shouldn’t subsidize anyone. Government messes up most everything it touches?

https://erietimes-pa-app.newsmemory.com/?publink=158714e9e

Budget hearings began this week in Harrisburg, a long process that will culminate with the passage of a new spending plan by the end of June.

The next several months will be filled with contentious hearings and verbal sparring as lawmakers grapple with a $3 billion budget deficit. While legislators will argue about individual line items, a much larger issue will be largely ignored — the massive amount of money being wasted on fossil fuel subsidies.

According to research conducted by PennFuture, the fossil fuel industry received $3.8 billion in subsidies for fiscal year 2019 alone, or about $296 per Pennsylvania resident. This makes Pennsylvania one of the largest corporate subsidizers in a country that is the second largest fossil fuel subsidizer in the world.

This industry harms public health, degrades the environment and destabilizes our climate as the people of Pennsylvania suffer very real costs. Instead of ensuring the fossil fuel industry pays for the damage it causes, the commonwealth has been more interested in helping corporate polluters generate as much profit as possible.

These subsidies distort our markets and make it harder for better, cleaner technologies to compete. At a time when we need to be transitioning to a clean energy economy to fight the climate crisis, these subsidies do the exact opposite by prolonging our dependence on polluting industries.

Of the $3.8 billion in fossil fuel subsidies, the fracked gas and petrochemical industry captured at least $2 billion, or 52%. Despite the continued pleas of those living nearest fracked gas and petrochemical development, more subsidies are added every year. Our subsidy problem is getting worse, not better.

The industry continues to claim that keeping the subsidies flowing will bring jobs and prosperity, but as a recent

report from the Ohio River Valley Institute shows, counties with significant oil and gas development are far below average in both job growth and personal income. Even the S&P 500 Energy Index has fallen more than 50% from its 2014 peak. This is the picture of an industry in decline.

As this decline continues, our families, schools and local governments wrestle with unprecedented challenges made worse by dirty industries that are given a free pass to drain our resources. Sustainable alternatives exist, but any attempt to invest in better choices is quickly attacked by the industry as the government ‘picking winners and losers.’

The damage doesn’t stop in the counties with fracked gas. Our report reveals an additional $11.1 billion in external costs, including drinking water contamination, infrastructure damage and health impacts like respiratory problems and cancers. That’s not to mention the greatest damages that come from methane pollution contributing to climate change.

Our legislators owe it to each and every Pennsylvanian to do better than this. PennFuture’s report details over 50 fossil fuel subsidies that have covertly wormed their way into Pennsylvania’s tax code and other rules and regulations.

After reviewing these harmful and unfair subsidies, we find our way forward with a package of key recommendations.

Perhaps most importantly: Pennsylvania’s fossil fuel subsidies are pernicious in part because they are buried out of sight and difficult to disentangle. To tackle this problem, we need to report and track these fossil fuel subsidies so that we can accurately understand the scope and nature of the problem at hand. While watchdog organizations like PennFuture are happy to bring sunlight to this problem, our state government should be providing this transparency. Even before achieving full transparency, however, there are a few things we can say for sure: Fossil fuel development and consumption is not sustaining our communities; it’s fueling their deterioration.

We ask that fossil fuel companies, for just once in their centuries-long existence, begin to pay the full price for consumption of limited natural resources, contribute their fair share to the state treasury, and prevent and mitigate their eroding impact on health and well-being, the environment and the climate.

These are commonsense solutions at a time we need them most. As budget season progresses, we will have our eyes on Harrisburg, hoping that our elected officials do the right thing.

Rob Altenburg is the director of the PennFuture Energy Center, and co-author of a new report that details fossil fuel subsidies in Pennsylvania.

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