In the Battle for Tax Subsidies, Big Oil Beats Renewables and the Poor

A collection of reports and articles this week helps illustrate just how economically skewed the nation—and the world—have become. Even as Big Oil continues to exploit heavy tax subsidies for near-record profits (and the occasional market-rigging scheme), tax subsidies for the industry dwarf those available for renewable energy sources.

That means we, as taxpayers, are (often unwilling) accomplices in the increasingly rapid deterioration of global ecosystems.

At the same time, a fresh federal analysis of census data paints a striking portrait of the nature and levels of poverty in the United States—and suggests yet another better use for public money, and public policy.

As Kevin Watkins, director of the British Overseas Development Institute think tank, argues at Project Syndicate, the world’s governments get a chance next week to make a run at ending tax subsidies for fossil fuel, and shift some of them to backing renewable-energy technology. The event is the Warsaw Climate Change Conference, which will be “a staging post on the route to the 2015 United Nations climate summit in Paris” to try to hammer out an international agreement on how to handle the developing climate crisis. According to Watkins:

    The necessary innovations are emerging. Recent developments in wind, solar, tidal, bio-energy, geothermal, and fuel-cell technology are transforming the scope for low-carbon energy production. Aside from saving the planet, these technologies could open up new investment opportunities, deliver affordable energy, and sustain growth.

    But that potential will be realized only if governments actively pursue green industrial policies. They need to align the goal of avoiding dangerous climate change with disincentives for carbon-intensive energy – including taxes, carbon markets, and support for green alternatives.

    Fossil-fuel subsidies have the opposite effect. They actively promote carbon-intensive energy and deter green investment. According to the International Energy Agency, governments pumped $523 billion into fossil-fuel subsidies in 2011. From a climate-change perspective, this is a world turned upside down: for every $1 in support for renewable energy, another $6 promotes carbon-intensive fuels.

Meanwhile, the Big Five oil companies recently reported a combined $23 billion in profits for the third quarter, a near record, and built on the backs of American taxpayers who pick up the tab for the taxes the oil companies don’t pay, and then get hit again at the gas pump. As the Center for American Progress reports:

    Even though profits were lower, the big five companies continue to enrich their largest shareholders and senior executives by using a large share of profits to buy back their own stock. This past quarter, the combined buybacks of the companies (save ConocoPhillips) were nearly $10 billion, or 43 percent of the four companies’ total profits. In addition, these five companies are sitting on more than $71 billion in cash reserves.

And they spent some $33 million lobbying Congress against changing the tax code to cut into their subsidies.

Meanwhile, the new census analysis found that even more Americans are living in poverty than previously reported based on the traditional census counts. Using a different formula called the “supplemental poverty measure,” the U.S. Census Bureau says some 50 million Americans are living below the federal poverty line. As the Los Angeles Times explains:

    The alternative yardstick, known as the supplemental poverty measure, is different from the official poverty rate in a few key ways: It takes tax credits and other government benefits into account. It also counts necessary expenses such as child care and out-of-pocket medical costs.

    In addition, it considers the different costs of housing from state to state. That makes a big difference in California, where the broader measure counts more than 8.9 million people living in poverty between 2010 and 2012 - far higher than the 6.2 million tallied the official way.

    The alternative measure found that 16% of Americans, nearly 50 million, are living in poverty, versus the 15.1%, or roughly 47 million officially counted.

So on the one hand, we have government policymakers and taxpayers giving the cold shoulder to renewable technology development while adding to the wealth of some of the richest corporations in the world as they continue to make the world less and less inhabitable. On the other hand, we have average Americans—the taxpayers footing the bill—struggling to feed their children and keep a roof over their heads as the world warms and climates shift.

It’s going to take more than a meeting in Warsaw to fix that.

Original Article
Source: truthdig.com
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