No More Energy Subsidies
Photo 1194781 © Dana Rothstein -


No More Energy Subsidies

The fear mongering and cronyism of climate change politics

If you’ve listened to environmentalists the last few days, it wouldn’t be surprising to hear you’re worried that rising sea levels will put Laguna, Huntington and Newport beaches entirely under water and that wildfires will then destroy whatever is left of Orange County.

“Droughts and fires and floods, they go back to ancient times. But we also know that in a world that’s warmer than it used to be, all weather events are affected by a warming planet,” President Barack Obama said in his major climate change speech on June 25. “The fact that sea level in New York, in New York Harbor, are now a foot higher than a century ago – that didn’t cause Hurricane Sandy, but it certainly contributed to the destruction that left large parts of our mightiest city dark and underwater.”

Environmentalists frequently imply global warming is causing an increase in the frequency and intensity of weather events like Sandy. Yet, a 2011 Reason Foundation study found that the world’s death rate from extreme weather events was lower from 2000 to 2010 than it was been in any decade since 1900.

Deaths caused by extreme weather events peaked in the 1920s, when there were 241 deaths a year per million people in the world. But from 2000 to 2010 there were just 5.4 deaths a year per million people, a 98 percent decline in the weather-related death rate.

Furthermore, Dr. Indur M. Goklany, author of the Reason report and science policy analysts for the United States Department of the Interior, found “deaths and death rates from droughts” today are “99.9% lower than in the 1920s.”

Nevertheless, President Obama says we need to act now by promoting green energy and targeting “big oil” companies.

“And because billions of your tax dollars continue to still subsidize some of the most profitable corporations in the history of the world, my budget once again calls for Congress to end the tax breaks for big oil companies, and invest in the clean-energy companies that will fuel our future,” the president said.

It would be great if President Obama were calling for an end to all subsidies and tax breaks for businesses. It would level the playing field and simplify the tax code. Unfortunately, he doesn’t want to do that. Nor does he want to save “your tax dollars.” Instead the president wants to redirect taxpayer money to his chosen alternative energy companies-which he’s already doing.

Last year, The Wall Street Journal examined federal subsidies to energy sectors and found, “Per megawatt hour, natural gas, oil and coal received 64 cents, hydropower 82 cents, nuclear $3.14, wind $56.29 and solar a whopping $775.64. So for every tax dollar that goes to coal, oil and natural gas, wind gets $88 and solar $1,212.”

And while the president may suggest oil companies are getting a free ride at taxpayers’ expense, a May New York Times examination of corporate tax rates concluded oil companies “pay relatively high rates.”

For decades American presidents have been promising energy independence and clean energy technologies. But instead of an energy revolution, taxpayers have gotten rent-seeking green energy companies taking advantage of special treatment from the government. This approach has resulted in infamous, expensive failures like Solyndra, which cost taxpayers over $500 million.

Instead of propping up wind and solar companies that have struggled to appeal to consumers, the president should eliminate all energy subsidies and tax breaks. By forcing the entire energy industry -oil, wind, solar, gas and nuclear power companies- to innovate and compete for customers in a truly free market, President Obama could unleash more technological advancement in the energy sector than any previous president has stimulated.

If the president is, as he claims, serious about being open to a “market-based solution,” the market is ready to help.

Adrian Moore, PhD, is vice president of policy at Reason Foundation. This column first appeared in the Orange County Register.