Taxpayers are spending billions subsidizing polluting industries.
By Molly Taft.
To hear the Wall Street Journal columnist Kim Strassel tell it, the Green New Deal would spend trillions of dollars while eliminating jobs, travel, delicious food and family time.
The Green New Deal “means every Democrat in Washington will get to go on the record in favor of abolishing air travel, outlawing steaks, forcing all American homeowners to retrofit their houses, putting every miner, oil rigger, livestock rancher and gas-station attendant out of a job, and spending trillions and trillions more tax money,” Strassel wrote after progressive Democrats put forward a resolution calling for a bold plan to zero out U.S. carbon emissions. “No jet fuel, no trips to see granny…[The Democrats] may not prove able to eradicate ‘fully’ every family Christmas or strip of bacon in a decade, but that’s the goal.”
In the weeks since the introduction of the Green New Deal, much of the right-wing pushback has mirrored Strassel’s. Pundits have dismissed the projected costs and panicked that a shift to clean energy will eradicate the hallmarks of American life. A lot of this hysteria has been in bad faith, based not on the resolution, but on a tongue-in-cheek FAQ that has since been deleted.
Right-wing pundits worried about costly policies that threaten our quality of life might take a look at some of the laws already on the books. Taxpayers are currently spending billions to support industrial agriculture, incentivize pollution-intensive air travel, and keep fossil fuels in business. A Green New Deal might actually cut some costs while delivering cleaner energy and healthier food.
Beef and Dairy
Let’s start with dinner. The steaks and bacon Strassel is so concerned about might carry a greater price for taxpayers than she realizes. From pasture to plate, the meat and dairy industries enjoy substantial government support. Even the conservative Heritage Foundation routinely makes a stink about agricultural subsidies.
It starts with raising cows. Ranchers get a big discount from the government to graze on public lands. A 2015 analysis from the Center for Biological Diversity found that taxpayers subsidized grazing on federal lands at a cost of $125 million in 2014.
Commercial cows raised for beef spend the last months of their lives in feedlots, where they feed on corn, soy and grain to fatten up for market. All this food comes at a steep discount: A 2016 analysis by the Union of Concerned Scientists found that the Federal Crop Insurance Program cost taxpayers $22 billion total — much of it devoted to corn and soy production — between 2016 and 2018. What’s more, these subsidies tend to disproportionately benefit the largest and wealthiest farmers instead of protecting smaller farms from weather disasters and unpredictable crop prices, as they were intended to do.
The billions of dollars in subsidies for industrial farming indirectly support dairy production, which benefits from additional government support. To offer one small example, in 2016, the USDA bought $20 million of cheddar — equivalent to 11 million pounds —from dairy farmers who were facing a 90 million-pound surplus of cheese. And, as Bloomberg Businessweek recently reported, a government-sponsored marketing group is busy helping fast food companies develop cheese-packed new products, like Taco Bell’s Quesalupa, for which the chain bought millions of pounds of cheese.
Unfortunately, last year’s wasn’t a one-off cheese buy. As Americans cut down on their dairy consumption, analysts say that continued subsidies from the government are keeping demand artificially high and are not allowing supply to fall naturally. As of January 2019, the industry still has a record-high amount of cheese on its hands — 1.4 billion pounds, enough cheese to wrap around the Capitol building in Washington.
The Green New Deal might eliminate these costly subsidies while also bringing some relief to farmers by encouraging healthier farming practices. And politicians and voters concerned about the decline of beef and dairy operations might listen to the vice president of the Indiana Farmers Union, Randy Dugger, who wrote in The Hill this week that the legislation “calls for support of independent family farms, sustainable farming, and healthy land practices and food systems” while keeping farming from “lining the pockets of corporate agribusiness.” Spending less money on wasted cheese could mean more help for the farm next door.
Like meat and dairy, air travel is also propped up by taxpayer dollars. Commercial air travel in the United States was jumpstarted by the Air Mail Act of 1925, which allowed the air mail industry to get off the ground — literally — through a contract with the federal government to deliver mail. Public money is still being used to support the commercial airline industry — just take a look at the $2 billion being spent on LaGuardia’s remodel.
Or consider the Essential Air Service program, which subsidizes flights from more than 160 rural cities where airlines otherwise would not fly. While Americans living in rural and remote places rely on this air travel, the program costs more than $200 million, and subsidized seats on many flights are routinely left empty. The program was targeted for elimination by the Trump administration in its 2018 budget, but it was ultimately saved by the House.
Certainly there’s an easier, cheaper, cleaner way to get folks from point A to point B. The history of the airline industry itself shows that the government subsidizing an expensive new form of transportation can work to create a new cross-country travel system. Rather than subsidize flight, which is a huge source of emissions, the federal government might put money into high-speed rail.
“High-speed rail between New York and Los Angeles will never make sense,” writes travel and tech analyst Geoffrey Morrison in CNET. “But between New York and Chicago? Portland and Vancouver via Seattle? Houston and Dallas? There are many city pairs that do make sense for high-speed rail.
“My guess is most people in the US would also appreciate the option of not having to go through the hassle of an airport to take shorter trips,” Morrison continues. “A reduction in greenhouse gas emissions is an added bonus. It just comes down to a serious desire and push to do it, which is one thing the Green New Deal wants to create.”
In early February, the week the Green New Deal was introduced, the Wall Street Journal ran an editorial on a failed wind farm deal in Falmouth, Massachusetts. “Democrats are pushing a Green New Deal to end the use of fossil fuels and rely entirely on renewable energy,” it began, positing that the example of Falmouth “offers a cold gust of reality on such ambitions with its experience on a $10 million wind-energy investment.”
Ten million dollars is a lot for one town to waste, but it pales in comparison to the hundreds of millions of dollars ratepayers in two Southern communities have had to pay to support just two failed “clean” coal plants.
In late 2010, utility Mississippi Power trumpeted that it had broken ground on an innovative new plant in Kemper County, Mississippi. The project would provide hundreds of jobs while “securing long-term, reliable, low-cost energy” for the county once it got up and running four years later, a press release claimed.
Seven years later, the plant finally opened after spending double the projected budget due to a combination of corruption, hubris and technological failures. After the Department of Energy kicked in more than $380 million in grants and the state decreed that $800 million in costs could be charged to ratepayers, the plant finally whirred to life. It ran on clean coal for a grand total of five days before the utility decided natural gas would be less expensive.
Taxpayers in Edwardsport, Indiana faced a lower up-front price tag for their clean coal project, but they are paying a different kind of cost. After the plant collected nearly $400 million from ratepayers to finance the project, Duke Energy opened up the Edwardsport coal plant in 2013. Unlike Kemper, the clean-coal technology is still working in Edwardsport — which may actually be worse for the people living there.
“Ratepayers of Duke Energy in Indiana are getting royally screwed” by the pricey plant, said David Schlissel of the Institute for Energy Economics and Financial Analysis (IEEFA). An analysis conducted by IEEFA last year finds that the cost of power averaged $145 per megawatt-hour from Edwardsport since its opening, compared to market averages of $32 per megawatt-hour. Edwardsport ratepayers are shelling out more than four times as much for power than other Hoosiers.
Schlissel, who has testified in court with regards to various coal closings, said that the industry invokes the idea of clean coal in bad faith when defending their plants. “The industry would say, ‘Our plant is carbon-capture-ready,’” he said. “What it meant is it had the physical space to put the technology in their plant” — not that the technology itself was ready.
The future, Schlissel says, is clear to those watching the markets.“We will have existing coal plants for decades, but there’s no future. The future is wind, solar, storage, some natural gas.”
With or without sweeping legislative change, the U.S. economy is already chugging towards a green future. By 2020, renewable power is projected to be cheaper than gas and coal. That doesn’t mean, however, that falling prices are going to usher in a clean-energy revolution in time to avert a climate catastrophe. To do its part to keep warming in check, the United States will need to radically overhaul its energy system in just a few short years. The question remains as to whether lawmakers will do what’s necessary to stave off calamity.
The Green New Deal offers an answer. It doesn’t just look at what will work for the next five years, but what will work for the next generation. The Green New Deal, as it stands, is not a roadmap or a set of instructions, but the beginning of an economic reckoning — or, as Washington Post columnist Philip Bump put it, an “intersectionalist delineation of a new U.S. economy, predicated on the existent threats of a warming world.” It aims to invest in projects that will keep us healthy and prosperous while slashing funds spent on polluting industries. Critics say we can’t afford such a proposal, but we are already paying dearly for the status quo. Perhaps we can’t afford not to.
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