We all know that a clear, predictable, and fair national policy encouraging investment in energy efficiency and renewable energy is the key to any real, viable solution to avoiding runaway climate change. If this is the case, then why does the overwhelming bulk of our federal tax dollars go to subsidizing the oil, coal, and gas industries and not clean energy? Why are the tax credits that support the fossil fuel industry permanent and unchallengeable? Why are the tax credits that support renewable energy temporary and constantly up for grabs?
According to a 2010 Environmental Law Institute study, the U.S. government provided $72 billion between 2002 and 2008 to the fossil fuel industry. About $54 billion of that total took the form of permanent tax credits for oil, coal, and natural gas producers. During that same period, the renewable energy industry received only $29 billion, most of it also in the form of federal tax credits. The difference is that none of the renewable energy tax credits are permanent.
Of course, as David Roberts writes in Grist, “Comparisons of direct subsidies capture only the tip of a giant iceberg – most of fossil fuels’ big advantages are invisible, beneath the surface, and entirely taken for granted.” Even a quick glance at the indirect subsidies makes clear how uneven the playing field is. External costs such as the public health toll paid for air and water pollution and the national security price of maintaining our addiction to oil amount to trillions of dollars.
Then there are the costs of climate change as superstorms such as Sandy become more frequent and violent. Early estimates of the damage from Sandy range up to $50 billion. And let’s not forget the enormous sunk costs of an infrastructure built on the assumption of cheap fossil energy: highways, suburbs, airports, and the like.
Viewed in this light, as Roberts vividly observes, shifting “from fossil fuels to renewable energy is not like going from Coke to Pepsi; it is to build a new world.” Not even Nate Silver, as good as he is, can tell us how long this new world will take to build and whether we will get far enough along in time to stave off runaway climate change. But one thing we should all be clear about: it’s long past the time to get started, and a national energy policy geared towards this future is an essential first step.