Subsidizing environmental damage
OXFORD, ENGLAND — The typical American pays as much as $2,000 per year in taxes to fund government subsidies that undercut the nation's economy and trash the environment. With the presidential campaign full tilt, it is perfect timing for voters who've just filed their annual tax returns to fully understand where some of their tax dollars are going and why.
Washington subsidizes excess food production, and then pays again to store the surpluses. Agricultural subsidies also foster overloading croplands, leading to topsoil erosion, pollution from synthetic fertilizers and pesticides, and release of greenhouse gases. In 1998, US subsidies averaged around $20,000 per farmer, costing each consumer an average of over $300 more for food.
In 1996, US subsidies averaged $27,240 per farmer, costing each consumer an average of $260 more for food.
Even with the recent increase in prices at the pump, gasoline in the US is still cheaper than bottled water, thanks to myriad subsidies. What economists call the "full social cost" of gasoline - including traffic congestion, road accidents and pollution - is estimated to be at least $5 per gallon. Moreover, gasoline subsidies create an energy policy by default that is the opposite of the government's priorities: prolonging dependence on foreign oil and discouraging investments in cleaner technologies. Traffic-congestion delays cost at least $100 billion per year. Pollution levies health and other costs that may well run as high as $150 billion per year.
Fossil fuels - not just oil, but coal and natural gas - are heavily subsidized, whereas they should be heavily taxed, if only because of such impacts as acid rain, urban smog, and global warming. As a measure of how economically efficient it is to curb fossil fuels, the US Clean Air Act produced net direct savings averaging $1.1 trillion a year from 1970 to 1990. Yet subsidies for fossil fuels mean that scarce investment is wasted on capital-intensive energy projects when it is far cheaper to simply save energy.
Were fossil fuels to be shorn of subsidies, they'd face the disciplines of the marketplace. Coal would compete with solar energy, wind power, and other clean and renewable energy on a level playing field. Similarly, if Congress funded clean, renewable energy with the same subsidies it provides fossil fuels, the alternatives would be commercially competitive.
Government subsidies are also at the root of much misuse of water supplies that are increasingly scarce in many areas of the US, particularly the wheat fields over the Ogallala aquifer - and thus threaten the future agriculture economy. Consequences of subsidies for commercial fishing include over-fishing and commercial extinction of fish stocks, which have led to huge bankruptcies and unemployment as well as higher fish prices for consumers.
Subsidies in just the five sectors listed total at least $300 billion per year, or one-fifth of all such subsidies worldwide. They distort the economy as well as lay waste to the environment. Why are they tolerated?
Because special-interest groups that pay heavily into election campaign finances come knocking for the payoff when the voters have done the job. There are at least 100 special-interest lobbyists per member of Congress in Washington, and they spend $100 million monthly on their activities.
Now that Americans have filed their tax returns for the year, they should think forward to another significant date - Nov. 7, when they'll cast their presidential votes.
Which candidate is serious about reforming election campaign funding? There are few measures that could do more for the economy, as well as the environment, than to eliminate these subsidies.
*Norman Myers, a British environmentalist, is a fellow at Green College, Oxford University.
(c) Copyright 2000. The Christian Science Publishing Society