Sunday, September 8, 2013

"Clean" Energy Subsidies vs. Oil Industry "Subsidies"

Recently, I posted some comments regarding a NJ Star-Ledger editorial titled "Clean" Energy companies, Not "Fossil Fuel Bosses," Need Political Favors to Compete, which I posted here

But there is more to say. In that editorial, the NJ Star-Ledger, arguing for more taxpayer subsidies for solar and wind companies, wrote"The research money for clean energy was not enough to begin with, and nowhere near the tens of billions we give as subsidies to fossil fuel industries."

The editors mix apples and oranges, in a couple of ways. For one thing, in classic statist fashion, they equate being against government interference as being against the object of that interference. They are not the same thing. For example, contrary to the Star-Ledger's implication, being against solar and wind subsidies is not the same as being against solar and wind energy. It's being against corporate welfare. Why would anyone oppose solar and wind, if someone wants to produce it by his own efforts and private investment?

For another, they equate tax provisions with taxpayer subsidies. Once again, the two are not the same thing. Those "tens of billions we give as subsidies to fossil fuel industries" are a myth. They get no taxpayer handouts, just tax provisions for expenditures like any other business. These tax provisions result in oil companies keeping more of what they have earned. They are not a subsidies.

David Blackmon has a good piece on the subject over at titled Oil & Gas Tax Provisions Are Not Subsidies for "Big Oil." 

Related Reading:

"Clean" Energy companies, Not "Fossil Fuel Bosses," Need Political Favors to Compete

The GOP Should Eliminate, not Cut, the "Clean Energy Budget"


Mike Kevitt said...

This is all true. It's also true that as solar and wind shouldn't get subsidies any more than fossil fuel should, maybe they should get favorable tax treatment (if they don't, already) just as fossil fuel does.

Mike LaFerrara said...

I'm not sure what tax treatment that is, but all energy producers should get equal treatment under the tax laws. The best equalizer would be to get rid of the corporate income tax.