Home > Uncategorized > The Question NEITHER Party Wants to Answer: Why are We Spending $649,000,000 to Subsidize on Fossil Fuel?

The Question NEITHER Party Wants to Answer: Why are We Spending $649,000,000 to Subsidize on Fossil Fuel?

Yesterday I read a CNN headline (that could have appeared in any mainstream media outlet) reporting that Secretary of Treasury Steve Mnuchin is alarmed that the US is experiencing a ballooning deficit. This is not a surprise to anyone who passed basic Economics class.  There is no real world evidence that the trickle down theory of economics, the beloved paradigm of the libertarian wing of the GOP, results in economic growth and lots of real world evidence showing that it inevitably leads to a point where politicians must choose between cuts to government programs or cuts to the safety net.

Today I read a June 12 article by Forbes writer James Ellsmore, an article I wrote about a few weeks ago from a purely educational perspective. Titled “US Spends Ten Times More on Fossil Fuel Subsidies Than Education”, Ellsmore’s article has a clear link to schooling. But upon re-reading the article it is evident that the US is not alone in making this subsidy and underspending on education is the least of the problem:

A new International Monetary Fund (IMF) study shows that USD $5.2 trillion was spent globally on fossil fuel subsidies in 2017. The equivalent of over 6.5% of global GDP of that year, it also represented a half-trillion dollar increase since 2015 when China ($1.4 trillion), the United States ($649 billion) and Russia ($551 billion) were the largest subsidizers.

The largest governments in the world are spending more and more money subsidizing an industry that marketed a de facto drug— fossil fuel— to the world knowing that in doing so it was damaging the planet possibly beyond repair. At the same time, these same nations supported environmental deregulation that enabled these fossil fuel pushers  to pollute the air and waters with impunity while enacting labor “reforms” that stripped workers in all parts of the economy of benefits, suppressed their wages, and prevented them from banding together.

China and Russia are not democracies and never have been. It is not news that their governments are operating at the behest of a small group of oligarchs. The US has been a highly functioning democracy, one that has balanced the needs of consumers and citizens with the needs for profits. But instead of marketing democracy to the world, we are marketing capitalism. We are willing to see China and Russia as “trading partners” in order to ensure that our businesses can “compete in the global marketplace”… and we’ve been willing to bargain away our democracy in order to satisfy the needs of a small group of businessmen who promote expansion of their businesses at the expense of civilization and the health of the planet.

And what would happen if the money spent on fossil fuel subsidies disappeared? Where could that money be spent?

IMF leader Christine Lagarde has noted that the investments made into fossil fuels could be better spent elsewhere, and could have far reaching positive impacts: “There would be more public spending available to build hospitals, to build roads, to build schools and to support education and health for the people. We believe that removing fossil fuel subsidies is the right way to go.

And if what if that money had been spent on subsidies for renewable energy instead of fossil fuel?

Had nations reduced subsidies in a way to create efficient fossil fuel pricing in 2015, the International Monetary Fund believes that it “would have lowered global carbon emissions by 28 percent and fossil fuel air pollution deaths by 46 percent, and increased government revenue by 3.8 percent of GDP.”

So.. why isn’t our country debating these subsidies? The GOP is clearly and unequivocally in support of the status quo in terms of energy use and the Democratic National Committee has declared the topic of climate change as “of limits” in their debates. Why?

Readers can draw their own conclusion. When I am try to answer this question through an optimistic lens, I believe that both political parties are focussed too much on the sacrifices we might have to make as a nation if we shift away from fossil fuel and not emphasizing the opportunities that would be available if we made such a decision. The fossil fuel industry, who wants to maintain the status quo in our energy policies and spending patterns, promotes the notion that any rapid shift away from their products will destabilize the economy and require the imposition of more government regulations and higher taxes on carbon products. Meanwhile, those who want seek to expand the use of renewable energy try to “out-fear” the fossil fuel promoters, emphasizing a future of weather catastrophes and hardship. As long as the arguments are framed in this fashion there is no upside to debating climate change. In my optimistic moments, I want to believe that some Presidential candidate will re-frame the debate and focus on the potential benefits of addressing climate change. The funds that would be available for public spending to build hospitals, to build roads, to build schools and to support education and health for the people, the jobs that would be created if we subsidized renewable energy over fossil fuel, and the clean air and water that would be sustained if we continued enforcing the environmental regulations put in place. When I answer this question through an optimistic lens I believe that given the facts voters will support a shift of our subsidies away from fossil fuel toward renewable energy and democracy will prevail.

When I try to answer this question through a pessimistic lens, though, I believe that both parties are beholden to the fossil fuel donors who have made it abundantly clear that climate change needs to remain off limits in debates and subsidies need to remain in place at all costs– even if those costs are to the well being of the planet. When I try to answer this question through a pessimistic lens, I see that democracy is in peril as well as the planet.

I hope that as voters realize that our country spent $649,000,000 on fossil fuel they might ask leaders in both parties why this is happening and think of ways this money could have been spent elsewhere without raising any taxes whatsoever.

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