10 Nov The wind-no, ethanol-no/ TAX THE TRAINS ad is back
Posted Nov 10, 2014, from Seattle WA.
Seattle Wildlife Artist Ed Newbold is running his nix wind and ethanol/tax the fuel trains ad again, in the Nov 11 Seattle Times news section. Ed is delighted that the tax-the-trains idea is gaining momentum and now–when voters seem to be near-forcing legislators to go find more money for education–is the perfect time for it. Ed has attacked US ethanol and European Biodiesel programs many times before but this ad is the first time he has publicly castigated tax-credits and mandates for the wind industry. Here is the ad:
The ad is trying to make the point that government cannot and should not try to micro-manage the energy sector. In wind and ethanol government is picking two very old technologies that have been tried and have failed (mostly) in the marketplace. In order to force investment in these two industries, government has not only put in place subsidies, but what Ed Newbold calls “Market-contradicting Mandates.” It’s important to make this distinction.
Subsidy Vs. Mandate
Suppose people got together and bemoaned the loss of jobs in the Pet Rock industry. They got organized and succeeded in getting a new law passed to subsidize the sale of pet rocks. If a rock costs $20, customers would now get a $5 credit on their taxes at the end of the year.
OK, this would be a bad law that would need to be discarded, but in the interim, it wouldn’t ruin anyone’s life or be totally unbearable.
Now suppose they got a better law passed for the Pet Rock Industry, a mandate. Everyone who bought five gifts would have to buy at least one Pet-Rock as a 6th gift. Now we’re talking! It would immediately attract the attention of investors, who would pour money into Pet Rock mfg and distribution centers and advertising. Champaign corks are popping.
The second law is not only market-distorting like a subsidy (there are many, many subsidies, hidden & exposed, throughout the economy and many subsidies are defended by pointing to counter-subsidies for competitor products) but Market-Contradictory. An industry that really, let’s face it, should be dead, is suddenly infused with life and excitement–and capital!
And this is why we have an ethanol and a wind industry, not because of subsidies, which might be defensible, but because of mandates. Neither industry would exist except as a shadow of itself otherwise. Investors know that if consumers are going to be forced to buy their product, they have a good chance of getting a return.
But, I hear people argue, this is a good thing if results in decreasing climate-forcing gases. But in reality, it doesn’t. It builds the wind and ethanol industries, but since it doesn’t affect the price of fossil fuels, it does practically nothing whatsoever to change the economic fundamentals in the fossil fuel industry. (In the case of ethanol, climate forcing arguably is higher with ethanol than regular gasoline, so even when there is one-for-one substitution, there is more climate-forcing.)
And just as importantly, it sucks up the money that could be investing in a real solution to climate forcing, creates massive complexity and political opposition to doing anything. It’s not only not a solution, it also guarantees there will be no solution, as all the interst, capital and technological innovation is channeled into already-failed ideas.
Climate forcing in fact has grown willy nilly under this regime of wind and ethanol, except for an unrelated development, the growth of horizontal drilling and fracking, has somewhat affected the graph by dropping the price of natural gas vs coal.
But if it sounds like I’m making the argument that nothing should be done, well, nothing could be further from the truth.
Tax the fuel Trains
In the ad I say that the problem is that fossil fuel prices don’t reflect the true costs these fuels impose on others. Fossil fuels slough off their costs on non-users in two ways: they receive subsidies that are by definition paid for by non-users, and they impose external costs that are paid for by whoever is victimized by the particular externality.
The ad goes on to reference a particular one-time external cost that was totally shocking: the destruction of the town of Lac Megantic, Quebec by a train carrying Bakken crude, with about 50 residents and half the town vaporized. We barely heard of this in this country, no doubt because the fossil fuel industry is so big and persuasive it has even news sources like NPR in its vest-pocket.
Our legislators are allowing these same type of trains to go by places like Century Link Field. But don’t worry, they have a strategy to protect our safety: cross their fingers: after all, tragedies like Lac Megantic are admittedly rare and they very well might not happen again.
But I slightly part company with the mainstream of the NW environmental movement here. They say “No trains” and “micro-manage the safety of these trains.”
I have sympathy for the “no trains.” If our legislators and politicians cared about us, they would ban crude shipments, but at the same time, I have this sense that that is never going to happen. We take risks all the time, and humans have shown a species-wide historical tendency to assume lots of risks of all kinds. I sense that “stop the trains” is a position that might help raise money for an organization but that it’s not a thing that will ever happen.
Tax the trains is much more likely to happen. It won’t be a high enough rate, but it’s going to strike people as a reasonable bargain: You put my life in danger, then at least help me with my taxes. It then creates an economic virtuous circle, where less fuel is shipped. The challenge is only to set the tax high enough.
PS Wind Power is “Bird-killing.”
Here is a link to an article by the American Bird Conservancy on misconceptions about wind power: