Re: [EVDL] Koch/Big-Oil Likes Its Own Giant Subsidy, not EVs'
According to a 2015 estimate by the Obama administration, the US oilindustry benefited from subsidies of about $4.6 billion per year.. in addition to the carbon emissions talked about here. Sent from my iPhone > On Nov 19, 2018, at 8:43 PM, brucedp5 via EV wrote: > > > > https://www.bloombergquint.com/onweb/big-oil-vs-electric-cars-carbon-tax-would-level-playing-field#gs.yPT11yc > Big Oil Doesn't Like EV Subsidies, Just Its Own Giant Subsidy > November 19 2018 Liam Denning > > (Bloomberg Opinion) -- You may not have heard, but electric vehicles are > just another one-percenter boondoggle, Jay Gatsby’s cream-colored Rolls > Royce reincarnated and partly paid for by you, the toiling masses, via > various subsidies. > > As an argument, it is tailor-made for an era of anger at “elites.” And it’s > one with which I’ve become familiar reading recent letters from > organizations such as Koch Industries Inc.[ > https://news.kochind.com/media-resources/On-The-Issues/Koch-Urges-Senate-to-Allow-Innovation-and-Consumer > ], affiliates of the American Petroleum Institute and Americans For > Prosperity [ > https://www.icc.illinois.gov/Electricity/workshops/evnoi.aspx > ], urging federal and state bodies to forgo support for electric vehicles or > their chargers. If wealthier types wish to buy them, so be it, but they > should pay for it themselves. As Koch’s letter opposing an extension of the > federal tax credit for EVs puts it: > > " I encourage you to allow innovation and consumer choice to drive this > industry, not tax dollars and government subsidies. " > > Stirring stuff, though it does rather gloss over some niggling details. > > They aren’t wrong about one thing: Subsidies for EVs tend to accrue to the > wealthy. A paper [ > http://ei.haas.berkeley.edu/research/papers/WP262.pdf > ] published in 2015 by Severin Borenstein and Lucas Davis of UC Berkeley > found exactly that. One explanation is that, even when subsidized, today’s > EVs are usually more expensive than regular vehicles, so they are bought by > wealthier people. > > This is clearly unfair. However, as Berkeley’s Borenstein and Davis wrote in > a blog post summarizing that same paper: > > " We find that tax credits are less attractive on distributional grounds > than pricing [greenhouse gases] directly … Whereas tax credits go > disproportionately to high-income households, a carbon tax would be paid > disproportionately by high-income households. " > > This uncovers the main problem with the whole elitist EVs argument: If not > these subsidies, then what? > > Addressing climate change means encouraging a switch away from emitting vast > quantities of greenhouse gases into the atmosphere in order to power our > societies. Leaving aside the unfortunate desire of certain parties to ignore > or obfuscate the science [ > https://www.bloomberg.com/opinion/articles/2018-09-13/big-oil-and-climate-change-losing-the-30-years-war > ] framing that threat, the central question is how to encourage that switch > most efficiently. In general, handing out regressive subsidies based on the > government elevating this or that technology, while perhaps politically more > doable, doesn’t meet that objective. > > A far-more efficient method is to put a price on the stuff you want less of > and then let capitalism do its thing, pushing consumption away from the > undesirables and investment toward innovative alternatives. Indeed, all > these letters demand government officials stand back and let the market do > its thing – except their version of the market leaves out one essential > element. > > Greenhouse gases and the threat they pose are everyone’s problem, but the > individual generating them at any given moment doesn’t pay toward dealing > with that. Dump your garbage on your neighbor’s lawn and you’ll wind up > paying to have it removed and probably a fine, too. Release 20 pounds of > carbon dioxide into the atmosphere by burning a gallon of gasoline, and it’s > a freebie. > > This is an enormous effective subsidy for fossil fuels and makes a mockery > of market piety. Using Yale economist and recent Nobel-prize winner William > Nordhaus’s [ > https://www.bloomberg.com/news/articles/2018-10-08/nordhaus-romer-win-2018-nobel-prize-in-economic-sciences > ] $31-per-tonne estimate of the social cost of carbon, it amounted last year > to $107 billion for energy-related emissions from oil and natural gas in the > U.S. Within that, emissions from transportation – the biggest source in the > U.S. and the only one still growing – enjoyed a free ride worth $59 billion. > > The cost of the federal tax subsidy for EVs is $2 billion at most across the > lifetime of the current program, according to a study cited in the Koch > letter (title: “Costly Subsidies For The Rich [ > https://www.pacificresearch.org/wp-content/uploads/2018/02/CarSubsidies_final_web.pdf > ]”). You may have noticed, too, the U.S. oil and gas industry is not exactly > hard
[EVDL] Koch/Big-Oil Likes Its Own Giant Subsidy, not EVs'
https://www.bloombergquint.com/onweb/big-oil-vs-electric-cars-carbon-tax-would-level-playing-field#gs.yPT11yc Big Oil Doesn't Like EV Subsidies, Just Its Own Giant Subsidy November 19 2018 Liam Denning (Bloomberg Opinion) -- You may not have heard, but electric vehicles are just another one-percenter boondoggle, Jay Gatsby’s cream-colored Rolls Royce reincarnated and partly paid for by you, the toiling masses, via various subsidies. As an argument, it is tailor-made for an era of anger at “elites.” And it’s one with which I’ve become familiar reading recent letters from organizations such as Koch Industries Inc.[ https://news.kochind.com/media-resources/On-The-Issues/Koch-Urges-Senate-to-Allow-Innovation-and-Consumer ], affiliates of the American Petroleum Institute and Americans For Prosperity [ https://www.icc.illinois.gov/Electricity/workshops/evnoi.aspx ], urging federal and state bodies to forgo support for electric vehicles or their chargers. If wealthier types wish to buy them, so be it, but they should pay for it themselves. As Koch’s letter opposing an extension of the federal tax credit for EVs puts it: " I encourage you to allow innovation and consumer choice to drive this industry, not tax dollars and government subsidies. " Stirring stuff, though it does rather gloss over some niggling details. They aren’t wrong about one thing: Subsidies for EVs tend to accrue to the wealthy. A paper [ http://ei.haas.berkeley.edu/research/papers/WP262.pdf ] published in 2015 by Severin Borenstein and Lucas Davis of UC Berkeley found exactly that. One explanation is that, even when subsidized, today’s EVs are usually more expensive than regular vehicles, so they are bought by wealthier people. This is clearly unfair. However, as Berkeley’s Borenstein and Davis wrote in a blog post summarizing that same paper: " We find that tax credits are less attractive on distributional grounds than pricing [greenhouse gases] directly … Whereas tax credits go disproportionately to high-income households, a carbon tax would be paid disproportionately by high-income households. " This uncovers the main problem with the whole elitist EVs argument: If not these subsidies, then what? Addressing climate change means encouraging a switch away from emitting vast quantities of greenhouse gases into the atmosphere in order to power our societies. Leaving aside the unfortunate desire of certain parties to ignore or obfuscate the science [ https://www.bloomberg.com/opinion/articles/2018-09-13/big-oil-and-climate-change-losing-the-30-years-war ] framing that threat, the central question is how to encourage that switch most efficiently. In general, handing out regressive subsidies based on the government elevating this or that technology, while perhaps politically more doable, doesn’t meet that objective. A far-more efficient method is to put a price on the stuff you want less of and then let capitalism do its thing, pushing consumption away from the undesirables and investment toward innovative alternatives. Indeed, all these letters demand government officials stand back and let the market do its thing – except their version of the market leaves out one essential element. Greenhouse gases and the threat they pose are everyone’s problem, but the individual generating them at any given moment doesn’t pay toward dealing with that. Dump your garbage on your neighbor’s lawn and you’ll wind up paying to have it removed and probably a fine, too. Release 20 pounds of carbon dioxide into the atmosphere by burning a gallon of gasoline, and it’s a freebie. This is an enormous effective subsidy for fossil fuels and makes a mockery of market piety. Using Yale economist and recent Nobel-prize winner William Nordhaus’s [ https://www.bloomberg.com/news/articles/2018-10-08/nordhaus-romer-win-2018-nobel-prize-in-economic-sciences ] $31-per-tonne estimate of the social cost of carbon, it amounted last year to $107 billion for energy-related emissions from oil and natural gas in the U.S. Within that, emissions from transportation – the biggest source in the U.S. and the only one still growing – enjoyed a free ride worth $59 billion. The cost of the federal tax subsidy for EVs is $2 billion at most across the lifetime of the current program, according to a study cited in the Koch letter (title: “Costly Subsidies For The Rich [ https://www.pacificresearch.org/wp-content/uploads/2018/02/CarSubsidies_final_web.pdf ]”). You may have noticed, too, the U.S. oil and gas industry is not exactly hard up. A quick scan of the Bloomberg Terminal indicates listed companies in the sector are forecast to make a collective net profit of $81 billion this year. What was that about handouts to wealthy elites again? The added twist is that the negative effects of climate change fall disproportionately on the poor. Low-income countries tend to be in regions likely to suffer the worst consequences and also lack adequate resources to deal with them
