Butting Heads With the Environmental Status Quo

Attacks mount on government subsidies that help farmers or loggers but may be harmful to nature

Lock a group of environmental activists, pro-business conservatives, free-market libertarians, and hard-nosed tax reformers in a room and you're apt to end up with a cat fight. But on one issue - government subsidies detrimental to nature - they're all singing in the same choir.

Billions of dollars each year go for such subsidies, packaged as federal expenditures and tax breaks. These range from government-built logging roads to price supports for peanut and sugar farmers to pork-barrel dams and other water reclamation projects.

Identifying the culprits is relatively easy. But dealing with them is not. Each subsidy comes with a political constituency, or as a recent study by the Center for the Study of American Business at Washington University in St. Louis puts it: "Each reform ... requires butting heads with some powerful element of the status quo."

This study (whose lead author, Murray Weidenbaum, headed the Council of Economic Advisers in the Reagan administration) cites annual federal expenditures totaling $1.2 billion and tax breaks of $3.9 billion resulting in activities harmful to the environment.

The Cato Institute, a libertarian think tank in Washington, warns that the problem is much worse than that. Surveying the whole subsidy scene, Cato estimates that Congress funds more than 125 "corporate welfare" programs costing American taxpayers some $85 billion a year.

A large chunk of this has to do with natural resources. If the true cost of public-lands grazing, hardrock mining, and industrial forestry in the West were borne by ranchers, miners, and loggers, the federal General Accounting Office has found, Uncle Sam would make some $300 million a year. Instead, the government loses millions.

"If the US Forest Service were a business, its economic assets would put it in the top five on Fortune magazine's list of the nation's wealthiest corporations," states the Washington University group. "But if it were ranked according to operating revenue, it would fall to No. 290. And in terms of net income, the Forest Service would be in bankruptcy court."

The Worldwatch Institute, a pro-environment research organization, reported recently that "trade restrictions and subsidies keep the price of sugar for US consumers at twice the global level, costing the public $1.4 billion each year, as well as creating the impetus to put more land in the Florida Everglades into sugar production."

At the same time, the federal government is spending some $200 million a year to help repair the damage done to the Everglades by sugar production.

In the West, below-cost irrigation water provided by US Bureau of Reclamation and US Army Corps of Engineer projects encourages farmers to produce crops - which the federal government then purchases to boost prices. University of Colorado law professor Charles Wilkinson calls this one of "the lords of yesterday" - laws and practices designed 100 years (or more) ago to spur Western expansion.

The most well-known of these is the General Mining Law of 1872, which still allows mining companies (typically large multinational corporations) to acquire title to federal land for a token fee and then dig up valuable minerals without having to pay any royalties to Uncle Sam.

The problem isn't exclusive to the United States. Worldwatch has tallied more than $500 billion a year paid by consumers and taxpayers worldwide "to subsidize deforestation, overfishing, and other environmentally destructive activities." For example, government subsidies to fishing fleets mean there are now enough boats and other equipment to catch twice as many fish as are available - a major reason for the destruction of global fisheries.

"Governments don't intend to waste money or destroy the environment with subsidies," says David Malin Roodman, author of the Worldwatch study. "But the fact is, most are obsolete or ineffective, and are hard to defend even before the taxpayer, consumer, and environmental costs are added in."

For years, reformers in Congress have tried to change such things as the 1872 mining law and the 1902 Water Reclamation Act so that they protect rather than damage the environment.

A broad "Green Scissors" coalition (including the Concord Coalition and the Sierra Club) has been compiling annual lists of spending and subsidy items deserving to be axed. The group claims some victories (defeat of California's Auburn Dam) and "near wins" (a tie-vote defeat in the House of Representatives on a bill to limit new logging roads on national forests).

And Republicans such as Rep. Connie Morella (R) of Maryland are joining longtime Democratic critics like Rep. George Miller (D) of California in pushing for reform. Says Mr. Roodman: "Conservative and liberal politicians alike should be able to agree that it's time to get government out of the business of paying the polluter."

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