Where the Subsidy Game Always Ends Up
by George SeldesMay 29th, 2007 at 08:15:29
Folks trying to cage subsidies for their preferred response to peak oil (i.e., biofuels, as in Oregon’s HB 2210) should take a good long look at this story and read the linked stories.
Because this is where playing the subsidy game leads: with a river of money going to the most powerful, rather than the most deserving.
It’s like church and state–once the boundary is erased, there’s no end to the evil that ensues, with zealotry combined with force.
Biofuels advocates should adopt a principled position: no production subsidies for ANYONE. R&D subsidies, OK.
But once you let the subsidy genie out of the bottle by arguing for subsidies for YOUR preferred solution, you unleash the same genie to work in service of much bigger forces. Tat is, once you start seeking subsidies, you start a bidding war for Congressional favor, and biofuels come to the war armed with skateboards and spitballs, while the coal lobby has M-1 tanks.
Oregon needs to take a principled stand to give the feds a model for how we get ourselves out of our energy pickle without destroying climate stability:
1) no subsidies for fossil fuels of any kind (coal, oil, or natural gas)
2) no subsidies for any energy derived from fossil fuels (i.e., any subsidies for renewables paid only on the actual NET renewable energy produced)
3) fully fund R&D for alternatives to carbon-based fuels before any funding for production.
May 29th, 2007 at 2:15 pm
Good post. The genie is already out of the bottle, and R&D is ultimately subject to abuse/waste - for example, we’re paying for the R&D to design the dimples on the Tiger Woods golf ball.
Challenging tax breaks like the double tax credit people get for buying hybrid cars (making the last $16,000 of income tax free) is laudable, though sadly not winnable politically. Conservation - loved the term “negawatts” - has always made dollars and good sense, and is ought to be the cross-roads between free-market libertarians and progressives.
May 29th, 2007 at 7:30 pm
I can’t get too stressed about paying for R&D for aerodynamics of golf balls. I can think of several spinoff applications, including in promoting energy efficiency of vehicles and machines. Not to mention, the modeling that comes out of something like this is a very worthwhile skill to spread around.
No, the thing to get stressed about isn’t the little one offs, even if 99% of them fail–once in a while you do get a big payout from real R&D. The thing to get bent about is the subsidy for the thing DESPITE the R&D not being complete, where the R&D in hand shows that production is a net loser or at best marginal, and where the product doesn’t do what it’s supposed to do (reduce fossil fuel dependency and greenhouse gas emissions).
Of course there’s R&D that’s actually R&D and then there’s R&D where the purpose is to provide cover for spending we’d like to do anyway and we really don’t care about the result (see Star Wars, for example).