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Wasting a Trillion Dollars to "Prevent" Global Warming Is Stifling Economic Recovery
Raymond Richman, 4/12/2012
Last March 29, 2012, the President of the United States told two untruths when he called on the Congress to end taxpayer giveaways to the oil industry and instead to double-down on investments in clean energy industries “that have never been more promisingâ€.Â
The first untruth is that we have been giving special benefits to the oil industry. That would only be true if one includes the industry’s “social costsâ€, the costs of pollution from  emissions from the burning of fossil fuels, but not if you also include the “social benefits†which environmental extremists always ignore. Indeed, the “social costs†have not been very costly while the “social benefits†have been enormous. The alleged social costs include health effects while the evidence is clear that we are living longer healthier lives. The industrial revolution which raised living standards throughout the world was made possible by plentiful and cheap fossil fuels.Â
The huge expenditures and costs placed on households and businesses by the government (EPA et al and so-called clean air laws have had no measurable effect on climate change. Indeed, a growing number of physicists, geologists, archeologists¸ and other climate change scientists reject the “undeniable†anthropogenic or man-made global warming (AGW) theory and argue that natural forces, especially the sun’s magnetic disturbances and their effect on the amount of cosmic rays reaching the earth, are more likely the major cause of climate change. An experiment is under way at CERN, the world’s foremost nuclear laboratory to test that hypothesis. The world is spending trillions of dollars on the basis of unproven AGW theory.
The second untruth is that investments in clean energy industries “have never been more promising.†The truth is that neither wind nor solar will be economical for decades if not a century or more. Neither is reliable and both need to have back-up generating facilities and neither is competitive with nuclear, natural gas, coal, and water power. The President mentioned algae as a source and even the Obama-supporting press laughed at that. All the alternative so-called renewable sources have serious social costs. Wind mills are noisy and are destructive to birds and solar is more expensive and requires huge amounts of acreage. Their growth is limited in any case and both are inherently unreliable. They will always require government subsidies and will never pay their own way. The evidence is clear that so-called renewable energy plants, wind and solar, are unsustainable. The fact is that every wind and solar plant has needed subsidies equal to or greater than half its cost.
This has contributed to increases in government debt and added to the “sovereign†debt of states and nations AND they pay no taxes. Contrast the public costs of so-called “green†energy with producers of fossil fuels. Oil, coal, and natural gas companies not only require no subsidies but they pay enormous sums in taxes. According to the federal Energy Information Administration, as reported in the Wall St. Journal, the oil industry paid some $35.7 billion in corporate income taxes in 2009, the latest year for which data are available. Wind and solar plants not only pay no taxes, tax credits being one of the incentives to construct such facilities, but they often receive cash and land from federal and state governments and exemption from local government property taxes. Many are also enabled to borrow at low interest rates as a result federal government guarantees of loans made by banks and other commercial lenders. The money wasted on them can and should be put to better uses. To mention a few, controlling floods, getting hurricanes and tornadoes under control, and reducing the possibility of natural disasters. That would be meaningful climate change.
The U.S. government is stating a half-truth when it states that oil companies receive government subsidies. They used to enjoy percentage depletion allowances but those are now denied to the large oil companies. What they pay in income taxes exceeds their net income. Moreover, when the wells they dig prove unproductive, they can only use their losses to offset gains from their productive wells. They pay more taxes to federal and state governments than any other sector of the economy. Wind and solar plants add to the fiscal deficits of the states and federal government and raise the cost of energy to businesses and households. The trillions of dollars being spent world-wide by governments, businesses, and.households to prevent global warming is not only futile but is preventing economic recovery in the U.S. and most of Europe. Hundreds of entrepreneurs and their thousands of engineers and managers and millions of temporary workers are essentially wasting their talents in producing energy plants and fuels that make no contribution to economic well-being
In fact, the main federal incentive for the wind industry, the 2.2 cents per kilowatt hour Production Tax Credit, is set to expire on December 31, 2012.
The economic growth in developing countries in Europe, Africa, Latin America, and Asia is highly dependent on the growth of government debt and trade deficits in the U.S. and Europe. The international trade deficits of the U.S. and Europe, with the exception of Germany, that are feeding that growth, are unsustainable --to use a favorite term of environmentalists. Â
The proponents of foolish measures to prevent global warming argue that capitalism cannot be sustained in spite of the fact that capitalism has grown and continues to grow. Socialist nations â€" China is a good example -- that today show growth have embraced capitalism at least temporarily-- in order to grow. Private enterprise economies have delivered the world’s highest sustainable living standards for workers throughout the world while the economies of and living standards in socialist countries stagnate. It is time to get real about climate change and time to get supicious about the motives of the proponents of foolish and expensive "renewable" sources.
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