Hansen on 'fossil fuel subsidies'

They should be gradually eliminated 15

Even more from NASA's climate guru:

Given the damage that fossil fuels cause to the climate, human health, wildlife, forests, lakes, ocean fish, etc., you may think that we place a very high tax on fossil fuels, right? Umm, well, not exactly. On the contrary, our government, egged on by special interests, chooses to subsidize them, or, more accurately, they volunteer you to subsidize fossil fuels.

...

Being from Iowa, I point out an example on the farms, pointed out to me by Bruce Johansen, who found it in an article by Steve Mufson. Franklin Roosevelt granted subsidies for coal-fired power plants to bring electricity to farms in the 1930s. Although this goal has long since been achieved, rural electric cooperatives continue to rake in billions of dollars to build conventional coal-fired power plants. These subsidies remove any pressure for the rural co-ops to promote energy efficiency or aggressively tap renewable resources. As a result, rural co-ops rely on coal for 80 percent of their electricity, compared with 50 percent for the rest of the country, and electricity demand at rural co-ops is growing at twice the national rate.

This is an example showing that fuel use does depend upon pricing, in this case a negative tax (a subsidy). As Amory Lovins has shown, there is enormous untapped potential in energy efficiency and energy sources that produce less or no CO2. However, to fully tap that potential we need to eliminate perverse disincentives such as fossil fuel subsidies, and we need to institute a moderate price on CO2 emissions. It does not need to be large, but businesses and consumers need to be aware that a gradually rising carbon price is certain. This provides time for technology development and for the phasing in of new practices and economic replacement of aging infrastructure.

Hansen also wrote this on special interests:

Actions needed to avert dangerous climate change are difficult mainly because of resistance from special interests. The special interests pretend that they are speaking for the good of the public. Horse manure. Overall the world "beyond petroleum" with stabilized climate will be a healthier world. Of course, moving to the next phase of the industrial revolution will require changes, dislocations, sacrifices and hard work. But these provide no reason for inaction. Indeed, moving forward will result in economic benefits from extensive technology development, with many good high-tech high-pay jobs. Prompt action that minimizes climate change will also allow most of the creatures of creation to survive, to continue to live on a planet resembling the one that has existed during the interglacial period covering the past several thousand years, the period of civilization. Most of the species now on the planet would be able to pass through the "bottleneck," the period in which the explosion of human population and associated pollution is stressing the ability of the planet to sustain all living things. By dealing with pollution, we can create a brighter future for the planet and all of life.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.

Joseph Romm is the editor of Climate Progress and a senior fellow at the Center for American Progress.

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  1. Bart Anderson's avatar

    Bart Anderson Posted 4:11 pm
    31 Jul 2007

    The collected emails of Joe HansenJoseph, at some point would it be possible to collate Dr. Hansen's emails?
    They make important points, and they are easier to read than academic papers.
    Selfish motive: I'd like to link to them!

    Bart


    Energy Bulletin

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  2. GreyFlcn Posted 4:46 pm
    31 Jul 2007

    HehDon't like harping too much of fossil fuel subsidies because then you get people telling you that $500 per ton of CO2 avoid for biofuels is "Okay".

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  3. Ron Steenblik Posted 5:10 pm
    31 Jul 2007

    Rural-electrification subsidiesI doubt that the subsidies for rural electrification are specifically linked to coal-fired power plants. Rather, I suspect, the fact that a large number of rural electric co-ops are located near rail lines that serve coal-mining areas means that they tend to favor coal as more than private power companies building near cities.

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  4. GreyFlcn Posted 5:30 pm
    31 Jul 2007

    WellHere's an article on that coal subsidy deal

    http://web.archive.org/web/20070516221432/http://www.msnb ...

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  5. Ron Steenblik Posted 6:27 pm
    31 Jul 2007

    Go to the sourceThe USDA's web page for Rural Electrification Loans says nothing about loans specifically for coal-fired power plants. It may be that coal plants are what the rural co-ops like to build, and thus they are the main beneficiaries of subsidized lending, but in the interest of accuracy these should not be called "low-interest loans to build coal plants", but "low-interest loans to build power plants", which have been a factor in rural co-ops basing 80 percent of their electricity on coal.

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  6. spaceshaper's avatar

    spaceshaper Posted 12:30 am
    01 Aug 2007

    Rural kilowattsI talked recently to an executive in the rural electrical cooperative industry about this issue. Having something like one fourth the customers per mile of distribution line compared to the investor-owned sector is one of the many reasons they have traditionally received subsidy support like this to balance costs to customers. Now that rural electrical supply is increasingly to high-income exurban commuter development and less and less to low-income farm families may be a reason to review the basis of that subsidy: however it is correct that the subsidy is not specifically tied to coal generation.
    The fact remains though that as rural electrical provision implicitly attracts higher costs than urban and suburban distribution the pressure to seek the cheapest generation options is intense. Perhaps rural electric programs will have more to gain than most from emerging distributed generation technologies - that remains to be seen. For now their options are still limited. For decades the boards of these cooperatives have accepted greater kWH sales as the core measure of performance. They face some serious challenges as they go forward.

    The true meaning of life is to plant trees, under whose shade you do not expect to sit.

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  7. amazingdrx Posted 12:32 am
    01 Aug 2007

    Subsidy diversionHillary talked about diverting fossil fuel subsidies to renewables in that video featured here on the blog excerpted from the debate.   It was contained in the answer to the question about nuclear power  by Edwards, Obama, and Hillary.

    http://amazngdrx.blogharbor.com/blog

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  8. JMG's avatar

    JMG Posted 2:09 am
    01 Aug 2007

    ActuallyRural electric co-ops show how neutral subsidies can turn out badly.  The rural electrification project was perhaps the most popular and successful anti-poverty program in America for decades.  Started by Roosevelt and propelled by the need to find some use for all those megawatts provided by the new Tennessee Valley Authority and Bonneville Power Authority, the co-ops were the first to bring lights to the hollows in many places.
    I had a group of friends out west who, as young boys, had to haul water by hand and milk cows by lantern light because the private power company would not bring electric into the county; the public utility districts provided "postage stamp rates" (flat rate for all takers, regardless of density) -- socialism, in other words.
    Lyndon Johnson really got his start in politics when he took a job with the rural electric program, which brought parts of Texas into the 20th Century in the 30s.
    The problem was that the program and the subsidies, as usual, don't stop when the problem does.  Once virtually everyone who wanted it had power, the REA became a political powerhouse with a singular mission: keep the subsidies going, no matter what.
    A lesson perhaps:  not all subsidies are bad, socialism can be very popular in America, and subsidy programs need to be designed carefully so that they don't become like the March of Dimes, a permanent institution that continues after the reason for its creation passes on.

    Save the world: Reduce greenhouse gas emissions 5% annually.

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  9. spaceshaper's avatar

    spaceshaper Posted 4:37 am
    01 Aug 2007

    Hrrmfh..."the public utility districts provided "postage stamp rates" (flat rate for all takers, regardless of density) -- socialism, in other words."
    Bit of a stretch as a definition ... Comrade Lenin would not be amused. A flat rate fee is what my ISP charges, regardless of location. Socialist it ain't.
    (insert friendly emoticon of your choice here)
    I agree entirely that the subsidy is past due for review.

    The true meaning of life is to plant trees, under whose shade you do not expect to sit.

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  10. GreyFlcn Posted 4:41 am
    01 Aug 2007

    On top of whichFederalism and Socialism are actually polar opposites.
    Government owned

    versus

    Worker owned

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  11. GreyFlcn Posted 4:45 am
    01 Aug 2007

    But then againAs Adam Smith put it

    http://greyfalcon.net/smith.png
    It is the proper role of government to control and regulate "public goods".
    Electricity and the postal system are public goods.
    Much in the same way that Military, Education, and Roadways are public goods.
    It's only private commodities where competition is self regulating.

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  12. JMG's avatar

    JMG Posted 8:36 am
    01 Aug 2007

    PUDs ARE socialismI think that public utility districts qualify as socialist by anyone's definition: publicly owned, with elected boards, with all members having one vote, rather than votes according to wealth.

    Save the world: Reduce greenhouse gas emissions 5% annually.

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  13. sunflower's avatar

    sunflower Posted 9:16 am
    01 Aug 2007

    People to the PowerPUD Boards answer to members, not shareholders, and members can mandate no more coal.  
    Lucky me, my PUD only gets 1% from coal.

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  14. spaceshaper's avatar

    spaceshaper Posted 11:21 am
    01 Aug 2007

    ... sounds like just plain ole' democracy to me"I think that public utility districts qualify as socialist by anyone's definition: publicly owned, with elected boards, with all members having one vote, rather than votes according to wealth."

    The true meaning of life is to plant trees, under whose shade you do not expect to sit.

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  15. JMG's avatar

    JMG Posted 5:03 pm
    01 Aug 2007

    Hmmmm, maybe that explainswhy we have a hard time knowing what to call it --- such a rare thing these days!

    Save the world: Reduce greenhouse gas emissions 5% annually.

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