Guest Post by Willis Eschenbach
There’s a new study out, under the imprimatur of the Energy Institute of the Haas School of Business in Berkeley, California, entitled The Distributional Effects of U.S. Clean Energy Tax Credits. As the title implies, it looks at who actually profited from the various “green energy” tax credits across the United States. SPOILER ALERT! It wasn’t the poor folks.
How much money are we talking about? Well, the paper says that from 2006 to 2012, the taxpayers have been on the hook for $18 BILLION DOLLARS to fund these subsidies, money that would have otherwise gone into the General Fund.
And just how much money is eighteen billion dollars? Here’s one way to think about eighteen gigabucks, regarding safe, clean drinking water.
Water Wells for Africa reports from their ongoing projects that on average it has cost them about $3.50 per person ($7,000 per well serving 2,000 people) to provide people with clean safe well water. So eighteen billion dollars is enough money to drill drinking water wells for three-quarters of the world’s 7 billion inhabitants. (Yes, I know that’s a gross simplification, some folks don’t live over a subterranean water table, and so on, but it is still enough money to drill the two and a half million wells that would be needed.)
So what did we do with this huge amount of money, enough wealth to truly change the lives of the world’s poor?
Well, following the brilliant policies pushed by the Obama Administration and the climate alarmists, we took enough taxpayer money to truly change the lives of the world’s poor folks … and instead, we gave it to the American rich folks.
No kidding! This is not a joke. This is what passes for moral activism in the liberal American universe. Throwing money at the rich is seen as striking a noble blow for POSSIBLY saving the poor from a tenth of a degree of warming by 2100.
Sadly, it’s no joke at all—the whole war on carbon has been a tragedy for the poor. In this case, the result of these misguided tax subsidies, of the type which have been pushed by climate alarmists for years, has been to create a real climate “hockeystick”. Here is the data from their paper:
Figure 1. Distribution of benefits of the “Clean Energy Tax Credits” by the income class of the benefit recipient for the period 2006-2012. All values are percentages of the given benefit. “Residential” is subsidies for residential solar systems and weatherization. “Hybrid” are the subsidies paid to the owners of hybrids, as well as hydrogen, fuel cell and natural gas vehicles. “Electric Vehicle” is the subsidy paid to the pure electric vehicles like the Tesla, Leaf, and Volt.
Note that in all cases, the bottom half of the income scale got 4% or less of the benefits …
Look, if someone wants to fight the claimed evil menace of CO2, that’s their business.
And when they want to justify it on the basis that to them, it is a deed most noble and virtuous to be POSSIBLY helping the poor in 2050 by POSSIBLY reducing the future global average temperature by a few tenths of a degree … well, I gotta say that’s as dumb as a bag of ball bearings, but there’s no law against dumb.
But that’s just for starters. From there, it gets ugly fast. Tragically the preferred method of fighting evil carbon is to increase the cost of energy, which is an extremely regressive tax. Not only is it regressive, but unlike many taxes, there is no escape at the bottom of the income scale from increased energy costs. The poor pay no income tax, but they pay energy costs, and energy costs are a greater portion of their expenses than for the rich. So rather than going down with decreasing income, the effect of hikes in energy costs go UP with decreasing income. Like I said, it is among the most regressive,inescapable kinds of taxes you could design.
Raising energy costs sentence the global poor to further impoverishment, sickness, and even death. And hiking energy prices based on the pathetic justification of a POSSIBLE cooling by 2050 of a few tenths of a degree is a crime against the poor of unimaginable size and ubiquitous effect. The war on carbon literally hurts, sickens, and kills poor people all over the world. And I can assure you … the poor are not amused.
But I guess that merely shafting the poor by increasing energy costs doesn’t help the rich enough. So the other noble and virtuous method for POSSIBLY helping the future poor is to fling tax money at various pluted bloatocrats … yeah, that’s the ticket. We’ll help the poor in 2050 by making it easier for rich people to buy a new $100,000 Tesla, and meanwhile Elon Musk is laughing all the way to the bank … at this point, we have to wonder how much folks like Al Gore and Warren Buffet and the UN Climate Ambassador Leonardo Dicaprio had to do with the design of these tax subsidies for the rich.
And of course, these are just the income tax subsidies. They don’t include the massive subsidies handed out directly to the solar and wind industries. They don’t include the subsidies paid to the people wealthy enough to justify rooftop solar when the utilities have to buy their electric production at three times market value … or the cost that I and millions of others pay as electrical consumers to subsidize those over-the-top rooftop solar payments. They don’t include the cost of Solyndra and the other solar companies slurping at the public trough. They don’t include the millions of dollars that with one stroke of the pen Obama gave to his billionaire pal Warren Buffet by vetoing the Keystone pipeline. This is merely the Federal tax-related subsidies, nothing more … and this tiny part of the global waste in the war on carbon is eighteen billion freakin’ dollars.
But always remember … this is all being justified by the alarmists on the basis of “Think of the grandchildren”, and because they’re saving the planet from imminent doooom and destruction.
And if you are someone saving the planet from imminent doooom and destruction, well, you are the man. There is no action that you shouldn’t take if it is in the service of your noble cause. You know that you have right on your side, you’re preventing disaster. You know you are fighting the good fight to cool the fevered brows of those sweltering in the 2050 heat by at least a tenth of a degree, and that it is a fight that has to be fought if we are to save the very planet. Your strength is as the strength of ten because your heart is pure, and you have the moral high ground. As a result of all of that, there is no transgression you won’t commit in order to have other people pay to make your beautiful Elysian (and slightly-cooler) dream come to fruition … and meanwhile, let’s go for a spin in your new Tesla. After all, you only bought an electric car because it’s noble and virtuous and pollution-free … if you don’t count the coal-fired power plant providing your electricity.
I have a proposal for a new name for the Holocene, and it’s not the Anthropocene like some folks claim.
I think we should call it the Egoscene …
Regards to all,
My Plea For Better Understanding: If you disagree with someone, please have the courtesy to quote the exact words you disagree with. This will allow all of us to understand precisely what you are objecting to.
About The Title: For those not up on their English history, Robin Hood was the name of a legendary English outlaw whose most notable characteristic was that he robbed from the rich and gave to the poor … hence my invention of the term“Hood Robin Syndrome” to describe the opposite action.
Fossil Fuel Subsidies: To me, the issue is never the existence of a subsidy. It is whether we get something for the subsidy. For example, one of the fossil-fuel subsidies in the US is the tax exemption for diesel used by farmers and fishermen … in exchange for which, it encourages production and so we get more food. To me, that’s a good deal. The problem with renewable subsidies is that we’ve been subsidizing solar and wind since Jimmy Carter was President, and they are still not economically competitive in the grid-scale marketplace.
We get large value in return for fossil fuel subsidies, whereas for solar and wind subsidies we get almost nothing. Per kilowatt-hour (kWh) of energy produced from solar and wind, there is a subsidy to the producers of about two cents/kWh. Since base electric price in the US is around 8-10 cents per kilowatt-hour, that’s about a 20% subsidy.
The subsidy for oil, on the other hand, is about a hundredth of one cent per kWh, coal is about two hundredths of a cent per kWh, and nuclear is about eight hundredths of a cent per kWh.
Why the huge disparity? It’s because solar and wind don’t produce economically, so they have to be artificially propped up. I wouldn’t mind the subsidy if they actually produced. It’s the lack of getting value in return that is the problem.