Fossil Fuel Subsidies Run Rampant at the State Level
Earth Track released last week A Review of Fossil Fuel Subsidies in Colorado, Kentucky, Louisiana, Oklahoma and Wyoming. The report documents hundreds of subsidies to established fossil fuel industries and fossil fuel consumers in five U.S. states. Many of these policies have contributed to environmental damage, energy market distortions and fiscal shortfalls.
Political power drives state subsidies to fossil fuels
The U.S. news cycle as of late has been focused on the pending "fiscal cliff," a combination of automatic spending cuts and tax increases that put at risk the country's emergence from recession. In an effort to flag ways to safely cut the U.S.' burgeoning deficit, an unwieldy array of special tax breaks, often the result of political deals over many decades, have finally gotten some attention.
Yet the very same political drivers that have led to subsidizing powerful industries at the federal level have flourished at the state level as well. And in many states, among the most powerful industries are those involved with coal, oil and natural gas.
These subsidies have come through the operation of the state tax code to be sure, but also through every other available mechanism of government market intervention—a list that includes subsidized credit and insurance, infrastructure provision, unfunded oversight, direct grants and below-market resource sales. And, just as these other types of support have received insufficient attention in federal fiscal cliff discussions, they are too often ignored at the state level as well.
This report is a first pass at inventorying the subsidies on the state level. We have no illusion that we have captured everything, but we hope that others will continue to build on this inventory so that the full scale of state-level support for the fossil fuel sector will gradually become visible.
Even based on the subset of policies we have captured, it is clear that these programs have contributed to the fiscal turmoil in which so many state governments now find themselves, and to significant environmental degradation as well.
Filling in subsidy data gaps at the sub-national level
Although data on fossil fuel subsidies around the world have been growing, most of this information focuses on national level policies. The thousands of subsidies at the state, provincial or local levels are largely untracked—with little systematic documentation either in the U.S. or in most other countries of the world.
These gaps are unfortunate: in the aggregate, sub-national subsidies transfer billions of dollars per year to fossil fuel industries just like their federal counter-parts. They are additive to federal supports, further distorting the economics of specific projects and investment incentives across energy options. This review also illustrates that not only are subsidies purposefully targeted to oil, gas or coal large, but that the fossil energy sector captures a significant share of more general state incentive programs as well.
There is a great deal of money at play. The Tax Exemption Budget for the U.S. state of Louisiana, for example, contains a dizzying array of exemptions, exclusions and reductions that, all told, manage to forego three quarters of the state's corporate income tax revenue, more than half of its sales tax revenue, and nearly one-third of its severance tax revenue. Severance tax breaks in Louisiana were worth more than $350 million in 2010, nearly all benefiting the fossil fuel sector. Colorado has so many exemptions and offsets to severance taxes that only five of the more than 30 oil-producing counties in the state paid any net severance taxes on oil and natural gas, according to past reviews.
In Kentucky, public spending on coal haul roads comprised one of the state's largest subsidies to the coal sector in years past. Yet, the spending is poorly documented, a common situation with spending on energy-related infrastructure across the states evaluated.
Fossil fuel exemptions from state sales and motor fuel taxes are also frequent, and result in significant revenue losses to state treasuries. Yet, in many of these situations, blanket exemptions don't make sense and should be narrowed or eliminated.
Reducing market distortions: high value targets for state fossil fuel subsidy reform
The patterns in fossil fuel subsidies across states offered a number of high value areas for reform. Some of these are highlighted below:
1. There is no excuse for not tracking your subsidies. There are only a handful of states in the entire country that have no formal tax expenditure budget at all, but two of them (Colorado and Wyoming) were in our sample. None of the states evaluated had centralized public reporting of the many different programs to provide credit subsidies to private activities and businesses. Further, clear and consistent reporting on energy-related oversight and maintenance by governmental agencies and how it is funded was also largely missing. In all of these areas, small improvements in reporting would pay large dividends to taxpayers.
2. Don't ignore "general" subsidies when looking at subsidies to fossil fuels. Subsidies flow to power. Not always, not completely. But often and mostly. Fossil fuel industries are powerful, and they tap into any source of subsidy they can. The review of subsidies to oil and gas in Louisiana illustrates this quite point well, with substantial portions of some of the "general" subsidies flowing to fossil fuel beneficiaries.
3. Energy is a product, and should not be exempt from general state and local sales and use taxes. This common exemption costs state Treasuries hundreds of millions of dollars per year, but is difficult to justify for most recipients. Concerns about energy poverty are real, since energy is a life-sustaining good. However, ensuring the poor have reasonable access to energy services is already a central part of utility regulation across the country and thus can be separated from the issue of energy taxation. Lifeline rates, energy assistance programs, or other similar tools are well established to ensure the poor stay warm in cold climes and cool in warm ones. Particularly given the negative externalities associated with most fuel use, there is no justification for blanket tax exemptions for fuel.
4. Paying for the roads. Resource-intensive states do a poor job tracking extra construction and maintenance costs triggered by the heavier vehicles and more frequent traffic that routinely accompanies fossil fuel extractive activities. This data needs to improve, with costs pushed back onto the industries that trigger the costs rather than buried in state or local government road budgets.
Similarly, most states use motor fuel excise taxes to pay for transport-infrastructure (primarily roads). Yet, exemptions for many user classes that do use the roads (e.g., government vehicles) are common. In other cases, the states exempt forms of transport such as rail, boats, or aviation from fuel taxes entirely because they do not use roads. But where governments are also spending money on rail, water, or air infrastructure or oversight, different earmarking might be prudent, but full tax exclusion is not. These types of cross-subsidies are fiscally and environmentally damaging.
5. Subsidizing favored extraction activities needs a rethink. States routinely subsidize forms of energy they produce domestically or that come from lower productivity mines or wells. Some of these subsidies provide incentives to boost production or consumption of higher polluting fuels such as lignite or high sulpher coal. The policies are focused on protecting employment and extraction levels. They implicitly downplay the impact of the subsidies on environmental quality or on the ability of other fuels or energy services to compete. Tax exemptions for fossil fuels consumed or lost during the extraction process are also common.
In all of these situations, a rethink is needed. Fossil fuels in lower productivity wells are one type of marginal energy resource, but they are not the only one. Subsidies should not put higher cost fossil fuels at a competitive advantage to other, often cleaner, substitutes.
Conventional wisdom on propping up extractive industries as productivity declines is equally problematic. Old wells are sometimes reopened as prices rise or technology improves, regardless of the state subsidies for doing so. Further, the declining returns on old wells as costs rise and volumes drop really isn't that different structurally from what happens in many other businesses as technology and equipment ages, and new alternatives come to the fore. Yet we don't see the tax code littered with subsidies to keep other declining productivity businesses going in the face of new competitors. Government policy should be neutral with respect to aging industries rather than favoring polluting fossil fuels.
State subsidies to fossil fuels have been neglected for too long. They are wide ranging, large and often exacerbate environmental harm while also acting as a competitive impediment to emerging energy resources and improved energy efficiency to compete on an equal footing. By inventorying these subsidies in five states, we hope to start a conversation on how to get rid of many of them, and to provide a foundation on which others can continue to expand the subsidy knowledge base.
Visit EcoWatch’s ENERGY page for more related news on this topic.
Readers interested in sub-national subsidies may also find the following three resources of value:
1. OECD's inventory of fossil fuel subsidies. OECD partially funded our work, and a some elements of this review will be included in their updated installment of fossil fuel subsidies within OECD countries. Their most recent subsidy data can be accessed here. The updated printed report is slated for publication in January 2013.
2. Good Jobs First Subsidy Tracker database. This is the most extensive database I'm aware of covering a wide variety of state-level subsidies. The coverage on grants and tax breaks is strong and growing. But weaknesses in state reporting on other subsidy instruments reduce the ability of Good Jobs First to comprehensively track some of the other types of support. Thus, coverage of credit and insurance subsidies, below-market sales of publicly-owned minerals, or state-provided goods or services in the energy sector is more spotty. The values in the database can be viewed as a lower-bound estimate for total subsidies in a state.
3. United States of Subsidies database from the New York Times. Supplements information from the Good Jobs First database with additional sources, and provides a nice interface to facilitate tabulations of state-level subsidies to specific companies. Not fossil-fuel specific.
Google's New Timelapse Shows 37 Years of Climate Change Anywhere on Earth, Including Your Neighborhood
Google Earth's latest feature allows you to watch the climate change in four dimensions.
The new feature, called Timelapse, is the biggest update to Google Earth since 2017. It is also, as far as its developers know, the largest video taken of Earth on Earth. The feature compiles 24 million satellite photos taken between 1984 and 2020 to show how human activity has transformed the planet over the past 37 years.
"Visual evidence can cut to the core of the debate in a way that words cannot and communicate complex issues to everyone," Google Earth Director Rebecca Moore wrote in a blog post Thursday.
Moore herself has been directly impacted by the climate crisis. She was one of many Californians evacuated because of wildfires last year. However, the new feature allows people to witness more remote changes, such as the melting of ice caps.
"With Timelapse in Google Earth, we have a clearer picture of our changing planet right at our fingertips — one that shows not just problems but also solutions, as well as mesmerizingly beautiful natural phenomena that unfold over decades," she wrote.
Some climate impacts that viewers can witness include the melting of 12 miles of Alaska's Columbia Glacier between 1984 and 2020, Fortune reported. They can also watch the disintegration of the Pine Island Glacier in Antarctica. The changes are not limited to the impacts of global warming, however.
Moore said the developers had identified five themes, and Google Earth offers a guided tour for each of them. They are:
- Forest change, such as deforestation in Bolivia for soybean farming
- Urban growth, such as the quintupling of Las Vegas sprawl
- Warming temperatures, such as melting glaciers and ice sheets
- Sources of energy, such as the impacts of coal mining on Wyoming's landscape
- Fragile beauty, such as the flow of Bolivia's Mamoré River
However, the feature also allows you to see smaller-scale change. You can enter any location into the search bar, including your local neighborhood, CNN explained. The feature does not offer the detail of Street View, Gizmodo noted. It is intended to show large changes over time, rather than smaller details like the construction of a road or home.
The images for Timelapse were made possible through collaboration with NASA, the U.S. Geological Survey's Landsat satellites and the European Union's Copernicus program and Sentinel satellites. Carnegie Mellon University's CREATE Lab helped develop the technology.
To use Timelapse, you can either visit g.co/Timelapse directly or click on the Ship's Wheel icon in Google Earth, then select Timelapse. Moore said the feature would be updated annually with new images of Earth's alterations.
"We hope that this perspective of the planet will ground debates, encourage discovery and shift perspectives about some of our most pressing global issues," she wrote.
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By Asher Rosinger
Imagine seeing a news report about lead contamination in drinking water in a community that looks like yours. It might make you think twice about whether to drink your tap water or serve it to your kids – especially if you also have experienced tap water problems in the past.
In a new study, my colleagues Anisha Patel, Francesca Weaks and I estimate that approximately 61.4 million people in the U.S. did not drink their tap water as of 2017-2018. Our research, which was released in preprint format on April 8, 2021, and has not yet been peer reviewed, found that this number has grown sharply in the past several years.
Other research has shown that about 2 million Americans don't have access to clean water. Taking that into account, our findings suggest that about 59 million people have tap water access from either their municipality or private wells or cisterns, but don't drink it. While some may have contaminated water, others may be avoiding water that's actually safe.
Water insecurity is an underrecognized but growing problem in the U.S. Tap water distrust is part of the problem. And it's critical to understand what drives it, because people who don't trust their tap water shift to more expensive and often less healthy options, like bottled water or sugary drinks.
I'm a human biologist and have studied water and health for the past decade in places as diverse as Lowland Bolivia and northern Kenya. Now I run the Water, Health, and Nutrition Laboratory at Pennsylvania State University. To understand water issues, I talk to people and use large datasets to see whether a problem is unique or widespread, and stable or growing.
An Epidemic of Distrust
According to our research, there's a growing epidemic of tap water distrust and disuse in the U.S. In a 2020 study, anthropologist Sera Young and I found that tap water avoidance was declining before the Flint water crisis that began in 2014. In 2015-2016, however, it started to increase again for children.
Our new study found that in 2017-2018, the number of Americans who didn't drink tap water increased at an alarmingly high rate, particularly for Black and Hispanic adults and children. Since 2013-2014 – just before the Flint water crisis began – the prevalence of adults who do not drink their tap water has increased by 40%. Among children, not consuming tap has risen by 63%.
To calculate this change, we used data from the National Health and Nutrition Examination Survey, a nationally representative survey that releases data in two-year cycles. Sampling weights that use demographic characteristics ensure that the people being sampled are representative of the broader U.S. population.
Racial Disparities in Tap Water Consumption
Communities of color have long experienced environmental injustice across the U.S. Black, Hispanic and Native American residents are more likely to live in environmentally disadvantaged neighborhoods, with exposure to water that violates quality standards.
Our findings reflect these experiences. We calculated that Black and Hispanic children and adults are two to three times more likely to report not drinking their tap water than members of white households. In 2017-2018, roughly 3 out of 10 Black adults and children and nearly 4 of 10 Hispanic adults and children didn't drink their tap water. Approximately 2 of 10 Asian Americans didn't drink from their tap, while only 1 of 10 white Americans didn't drink their tap water.
When children don't drink any water on a given day, research shows that they consume twice as many calories from sugary drinks as children who drink water. Higher sugary drink consumption increases risk of cavities, obesity and cardiometabolic diseases. Drinking tap water provides fluoride, which lowers the risk of cavities. Relying on water alternatives is also much more expensive than drinking tap water.
A4: Choosing to drink fluoridated tap water over sugar-sweetened beverages to quench thirst is vital to protecting… https://t.co/3tm8wuWjeZ— Oral Health Watch (@Oral Health Watch)1600795750.0
What Erodes Trust
News reports – particularly high-visibility events like advisories to boil water – lead people to distrust their tap water even after the problem is fixed. For example, a 2019 study showed that water quality violations across the U.S. between 2006 and 2015 led to increases in bottled water purchases in affected counties as a way to avoid tap water, and purchase rates remained elevated after the violation.
The Flint water crisis drew national attention to water insecurity, even though state and federal regulators were slow to respond to residents' complaints there. Soon afterward, lead contamination was found in the water supply of Newark, New Jersey; the city is currently replacing all lead service lines under a legal settlement. Elsewhere, media outlets and advocacy groups have reported finding tap water samples contaminated with industrial chemicals, lead, arsenic and other contaminants.
Many other factors can cause people to distrust their water supply, including smell, taste and appearance, as well as lower income levels. Location is also an issue: Older U.S. cities with aging infrastructure are more prone to water shutoffs and water quality problems.
It's important not to blame people for distrusting what comes out of their tap, because those fears are rooted in history. In my view, addressing water insecurity requires a two-part strategy: ensuring that everyone has access to clean water, and increasing trust so people who have safe water will use it.
As part of his proposed infrastructure plan, President Joe Biden is asking Congress for $111 billion to improve water delivery systems, replace lead pipelines and tackle other contaminants. The plan also proposes improvements for small water systems and underserved communities.
These are critical steps to rebuild trust. Yet, in my view, the U.S. Environmental Protection Agency should also provide better public education about water quality testing and targeted interventions for vulnerable populations, such as children and underserved communities. Initiatives to simplify and improve water quality reports can help people understand what's in their water and what they can do if they think something is wrong with it.
Who delivers those messages is important. In areas like Flint, where former government officials have been indicted on charges including negligence and perjury in connection with the water crisis, the government's word alone won't rebuild trust. Instead, community members can fill this critical role.
Another priority is the 13%-15% of Americans who rely on private well water, which is not regulated under the Safe Drinking Water Act. These households are responsible for their own water quality testing. Public funding would help them test it regularly and address any problems.
Public distrust of tap water in the U.S. reflects decades of policies that have reduced access to reliable, safe drinking water in communities of color. Fixing water lines is important, but so is giving people confidence to turn on the tap.
Asher Rosinger is an assistant professor of biobehavioral health, anthropology, and demography and director of the Water, Health, and Nutrition Laboratory at Penn State University.
Disclosure statement: Asher Rosinger receives funding from the National Science Foundation on an unrelated project. This work was supported by the Ann Atherton Hertzler Early Career Professorship funds, and the Penn State Population Research Institute (NICHD P2CHD041025). The funders had no role in the research or interpretation of results.
Reposted with permission from The Conversation.
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A new report promoting urgent climate action in Australia has stirred debate for claiming that global temperatures will rise past 1.5 degrees Celsius in the next decade.
Australia's Climate Council released the report on Thursday. The council is an independent organization of climate scientists and experts on health, renewable energy and policy who work to inform the Australian public on the climate crisis. But their latest claim is causing controversy.
"Multiple lines of evidence show that limiting global warming to 1.5°C above the preindustrial level, without significant overshoot and subsequent drawdown, is now out of reach due to past inaction," Dr. Kevin Trenberth of the National Center for Atmospheric Research and Prof. Christopher Field of the Stanford Woods Institute for the Environment wrote in the foreword. "The science is telling us that global average temperature rise will likely exceed 1.5°C during the 2030s, and that long-term stabilization at warming at or below 1.5°C will be extremely challenging."
The report is titled "Aim high, go fast: Why emissions need to plummet this decade," and as the name suggests, it is ultimately concerned with urging more robust climate action on the part of the Australian government. The report calls for the country to reduce emissions by 75 percent by 2030 and reach net zero by 2035 in order to achieve the long-term goals of the Paris agreement, which means limiting warming to well below two degrees Celsius.
"The world achieving net zero by 2050 is at least a decade too late and carries a strong risk of irreversible global climate disruption at levels inconsistent with maintaining well-functioning human societies," the authors wrote.
The report further argues that global temperatures are likely to exceed 1.5 degrees Celsius in the 2030s based on existing temperature increases; locked-in warming from emissions that have already occurred; evidence from past climate changes and the percentage of the carbon budget that has already been used.
The report isn't a call to give up on the Paris agreement. It is possible that global temperatures could swell past 1.5 degrees Celsius but still be reduced by removing carbon dioxide from the atmosphere. Even if temperatures do exceed 1.5 degrees, every degree of warming that can be prevented makes a difference.
"Basically we can still hold temperature rise to well below 2C and do that without overshoot and drawdown," Will Steffen, lead report author from the Australian National University's Climate Change Institute, told Australia's ABC News. "Every tenth of a degree actually does matter — 1.8C is better than 1.9C, and is much better than 2C."
However, some outside scientists question both the accuracy and effectiveness of the report's claim. Both Adjunct Professor Bill Hare from Murdoch University and Dr. Carl-Freidrich Schleussner from Humboldt University told ABC News they have been trying to contact the Climate Council about its 1.5 overshoot claim for months. They said that it went against other major reports, including the UN Environment Program Gap Report and the recent Intergovernmental Panel on Climate Change Special Report on 1.5˚C.
"The big challenge their report reinforces is the need for urgent action to get on that 1.5C pathway, [so] it's very paradoxical to me that they've chosen to attack that target," Dr. Hare told ABC News.
However, Scientist Andy Pitman from the Center of Excellence for Climate Extremes at the University of New South Wales told The Guardian that the report's assessment was correct.
"It's simply not possible to limit warming to 1.5C now," he said. "There's too much inertia in the system and even if you stopped greenhouse gas emissions today, you would still reach 1.5C [of heating]."
However, one aspect everyone agreed on involved the importance of lowering emissions as soon as possible.
"[There is] absolute fundamental agreement on the task at hand, which is to get emissions to plummet," Simon Bradshaw, report author and Climate Council head of research, told The Guardian.
French winemakers are facing devastating grape loss from the worst frost in decades, preceded by unusually warm temperatures, highlighting the dangers to the sector posed by climate change.
"An important share of the harvest has been lost. It's too early to give a percentage estimate, but in any case it's a tragedy for the winegrowers who have been hit," said Christophe Chateau, director of communications at the Bordeaux Wine Council, told CNN.
Climate change, caused by the extraction and combustion of fossil fuels, has pushed winegrowing seasons earlier, putting crops at higher risk of cold — and wildfires supercharged by climate change also threaten American vignerons and farmworkers as well.
"I think it's good for people to understand that this is nature, climate change is real, and to be conscious of the effort that goes into making wine and the heartbreak that is the loss of a crop," Jeremy Seysses of Domaine Dujac in Burgundy's Côte de Nuits told Wine Enthusiast.
As reported by Wine Enthusiast:
Last week, images of candlelit French vineyards flooded social media. Across the country, winemakers installed bougies, or large wax-filled metal pots, among the vines to prevent cold air from settling in during an especially late frost.
With temperatures in early April as low as 22°F, and following an unseasonably warm March, this year's frost damage may be the worst in history for French winegrowers. Every corner of France reports considerable losses, from Champagne to Provence, and Côtes de Gascogne to Alsace. As a result, there will likely be very little French wine from the 2021 vintage reaching U.S. shores.
For a deeper dive:
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Climate change could make it harder to find a good cup of coffee, new research finds. A changing climate might shrink suitable areas for specialty coffee production without adaptation, making coffee taste blander and impacting the livelihoods of small farms in the Global South.
Published in Scientific Reports on Wednesday, the study focused on regions in Ethiopia, Africa's largest coffee-producing nation. Although studies have previously documented the impact of climate change on coffee production, what's less understood is how varying climates could change the flavors of specialty coffee, the researchers wrote.
The team aimed to fill this gap. Their results provide a glimpse into how future climate change could impact local regions and economies that rely on coffee cultivation, underscoring the value of local adaptation measures.
Researchers analyzed how 19 different climate factors, such as mean temperatures and rainfall levels, would affect the cultivation of five distinct specialty coffee types in the future, the Potsdam Institute for Climate Impact Research (PIK) reported. Although researchers found that areas suitable for growing "average quality coffee" may actually increase over time with climate change, regions where specialty coffee is grown will shrink — a pending problem in light of the global demand for high-quality coffee.
"This is an issue not just for coffee lovers, but for local agricultural value creation," Abel Chemura, the study's lead author, told the PIK.
Coffee profiles rely on specific climate patterns for their unique flavors, levels of acidity and fragrances. But in a warmer climate, the coffee cherry — the fruit picked from a coffee plant — matures faster than the bean inside, making for a lower quality cup of coffee, the PIK reported.
For example, the sought-after Yirgacheffe variety of coffee, which is cultivated in southwestern Ethiopia, could lose more than 40 percent of its suitable growth area by the end of the century, PIK reported. This could impact small farms and threaten Ethiopia's economy, the researchers noted.
"If one or more coffee regions lose their specialty status due to climate change this has potentially grave ramifications for the smallholder farmers in the region," Christoph Gornott, co-author of the study, told the PIK. "If they were forced to switch to growing conventional, less palatable and bitter coffee types, they would all of the sudden compete with industrial production systems elsewhere that are more efficient." In a country where coffee exports account for nearly a third of all agricultural exports, "this could prove fatal," Gornott added.
Climate change impacts on coffee production are not unique to Ethiopia. In Columbia's mountainous coffee-growing regions, temperatures are warming by 0.5 degrees Fahrenheit every decade, according to Yale Environment 360. Extreme levels of precipitation, which are becoming more common, also impact production, as they spread insect and fungal diseases.
"In earlier times, the climate was perfect for coffee," one small farmer in Columbia told Yale Environment 360. "In the period of flowering, there was summer. During harvest, there was winter. But from 2008 onward, this changed and we now don't know when it will be summer, when the coffee will blossom."
But researchers say there are glimmers of hope, emphasizing the importance of local adaptation measures that are designed for particular climates and communities. For example, in regions where temperature is an important factor for specialty coffee cultivation, the researchers suggest improved agroforestry systems that could maintain canopy temperatures, a promising step toward sustaining the "availability and taste of one of the world's most beloved beverages and, more importantly, on economic opportunities in local communities of the Global South," Gornott concluded.