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A Level Playing Field

Everyone hates their taxes being spent on subsidies — unless it’s to subsidize their own industry. It’s time for an honest debate about the role of subsidies in a 21st Century economy and, at least, a restructuring to a more level playing field.

Examples? When I served in California state government, the Schwarzenegger administration tried for three years to push through a solar incentive package. Ultra-conservative State Senator Tom McClintock rose during the debate in red-faced indignation and bitterly opposed any subsidy of an industry that couldn’t stand on its own two feet. I’ve heard that argument repeatedly, often by the same politicians who support massive subsidies to the oil and coal incumbents, despite the fact such “incentives” are hardly needed to get fossil fuels out of the ground.

The latest salvo comes from President Bush, who yesterday said it was time to end subsidies to “multimillionaire farmers.” He was addressing a point about sharp increases in food prices, making wealthy agribusinesses even wealthier, partially the result of rising fuel costs and ill-conceived government mandates/incentives to produce ethanol. Ironically, the President told Congress he would veto any bill than shifts even a small portion of the $100 billion/year subsidies given to oil companies towards alternative energy sources.

Given that oil companies are recording profits that are the highest in the history of commerce — not just in the oil business, in the history of ALL commerce — it is hard to fathom. Moreover, some say the incentives are still needed to keep oil companies investing in new oil exploration and to build more refinery capacity. But few new discoveries are being made or exploited and refinery expansion lags demand by an increasing and exponential pace. So much for performance-based subsidies.

The role of subsidies should not be annuities for wealthy campaign contributors, but should be used as a way to level the playing field when incumbents have been given a similar (or far greater) head start. They should be strategically used to jumpstart businesses that will provide multiple benefits to the people — in the case of incentives for renewable fuels or clean energy technology, the benefits are domestic jobs, reduced dependence on a shrinking fuel source, exports, improved public health by reducing pollution, and a planet that is less at risk of biting us in the backside with ever more drastic climate change impacts.

Those multiple benefits are something the incumbents can’t provide — and it’s time to tilt the playing field in the direction of positive outcomes and end the fossil-fueled, taxpayer-funded boondoggles to the rich.

Posted by: Terry Tamminen, author of Lives Per Gallon, The True Cost of Our Oil Addiction. Visit him at