Don't Whine Over Clinton's Energy Tax
I HAVE a journalist friend in Montana who says he has a sure-fire way to reduce the federal deficit: Put a 10-percent surtax on whining. When it comes to Bill Clinton's energy proposal, that's undoubtedly true.
The president's proposed energy tax has three general purposes: Raise $20 billion to $30 billion to help reduce the federal budget deficit; lessen dependence on foreign petroleum; and reduce pollution by putting more of this new tax burden on dirtier fuels like coal and oil. As predicted, the special interests are squealing and visions of doom have been predicted. The tax will impact the middle and lower classes most, it is said, and economic growth will be stymied.
The tax may in fact be somewhat regressive, but the "contribution" Clinton is calling for as part of "patriotism" doesn't seem exorbitant - an estimated $10 a month for those earning less than $75,000 a year. More importantly, an energy tax (in a country that pays far less for energy than other industrialized nations) surely would stimulate greater efficiency, which is what's really needed to reduce dependence on foreign oil and improve the environment.
The best response to those who say the country will need a lot more energy if its economy is to grow at even a modest pace (as the head of the American Petroleum Institute did in this newspaper recently) is found in recent history. From the oil embargo of 1973 through the 1980s, the United States gross national product (GNP) grew 46 percent - including 20 million new homes and 50 million more vehicles. The rise in energy use over the same period, however, was just 7 percent. Similarly, the industrialized
nations of the Organization for Economic Cooperation and Development saw their economies grow five times faster than energy use.
The reason? Efficiency. During that period in the US, seven times as much "new" energy was obtained from conservation measures (more fuel-thrifty autos, tighter buildings, better appliances, etc.) than from all other sources - what Amory Lovins of the Rocky Mountain Institute calls "negawatts." Even so, the US uses twice as much energy per unit of GNP as Japan and Germany, which means the nation starts out with a 5-percent cost disadvantage in its products. And meanwhile, as a recent report by the Center
For Study of Responsive Law points out, oil imports remain the largest part of the trade deficit.
Evidence is increasing that conserving energy is good for the economy in a direct way. Studies show that investing in efficiency technologies and procedures results in two to four times as many jobs as power-plant construction.
"The New York State Energy Office found that energy-efficiency measures could provide 23 to 31 jobs per million dollar expenditure, while a range of fossil fuel options was estimated to provide 2.7 to 16.5 jobs per million dollars," states the Center For Study of Responsive Law report.
Pacific Gas & Electric (the nation's largest public utility) reported last week that 600,000 northern California customers saved $75 million in 1992 by using energy more efficiently. That's the equivalent of supplying 90,000 homes with energy, and it also reduced air pollution by 287 tons of emissions. It's also $75 million that could be put to more productive economic use.
When one considers that 25 percent of all heating and cooling requirements in US buildings makes up for unwanted heat loss and gain due to inefficient windows, the pay back in constructing better buildings and retrofitting old ones becomes apparent.
Clinton could save on the federal budget and lead by example on energy efficiency by pushing for such improvements in the half million buildings owned by Uncle Sam. The Office of Technology Assessment figures this could knock about 24 percent off the federal government's energy bill, which is about $10 billion a year.
Critics will say the easy savings already have been made, but the evidence is clear that the potential is there for even greater savings - particularly when the hidden costs of new generating facilities as well as the performance of new technologies are factored in.
The proposed energy tax - and presumably Clinton's increased budget for energy-saving technology development - needs to be seen in this context.