campaign finance political donations nuclear subsidies state aid

Each day, every year, each nation, everywhere
environmental costs fossil fuels occupy

Fossil Fuels Subsidized $.5 Trillion Annually

Some reformers are trimming them but given campaign finance curbing subsidies is an uphill battle. We trim, blend, and append three 2012 articles from: (1) Economic Times (India), Jan 19, on contributions by N. Karunakaran; (2) BBC, Jan 20, on nukes by R. Black; and (3) Truthout, Jan 28, on oil by L. Brown (founder of Worldwatch and the Earth Policy Institute).

by Naren Karunakaran, by Richard Black, and by Lester Brown

A recent study covering a 12-year period of political donations by Rajesh K Aggarwal (University of Minnesota) portrays donations as negatively correlated with returns. He links larger donations with poor corporate governance and agency problems within firms.

Conversely, IBM, the $99 billion IT giant, is an exemplar. The company has shunned political activity and funding for over a hundred years! Colgate-Palmolive, Rolls Royce, HMV, and GlaxoSmithKline are beginning to think in the same vein.

Yet, a large number of companies spend unlimited money on 'independent expenditure and electioneering communication'. Candidates for the US Senate and the House of Representatives raised over $300 million in the first half of 2011 -- the highest reported in a non-election year. The 2012 presidential campaign will be the most expensive ever, at $6 billion or so, compared to $5 billion in 2008.

Companies from the utility sector, over the years, have been the most intensive spenders, as measured by spend per million dollars of earned revenue. The top spender was Pacific Gas & Electric Company, the utility provider, giving $6,547 for every $1 million in revenue. At number five was Monsanto, the agri-business giant, spent $805 for every $1 million in revenue.

To see the whole article, click here .

JJS: Another words, companies lobby for bailouts and privileges. PG&E gets a monopoly to supply Californians and Monsanto gets research funds and limited liability for putting nature at risk with its GMOs. And speaking of utilities, consider nuclear power, hugely subsidized in the US and the UK.

UK greens complained to the European Commission that government plans for nuclear operators include subsidies that have not been approved by the commission.

Dorte Fouquet of the German legal firm BBH, who drew up the complaint, said that EU energy policy strives for an open market with a level playing field. "The commission has repeatedly underlined that distortion of the market is to a large extent caused by subsidies to the incumbents in the energy sector."

Last year, a committee of UK MPs also said that the government was subsidizing nuclear power, despite promises that it would not.

Current UK proposals call for the operator to be liable for the first £1bn of cost from any accident. This is about a seven-fold increase on previous levels, but still a long way below the costs of a disaster such as the one that befell the Fukushima Daiichi plant in Japan last year. That has left the plant's owners, the Tokyo Electric Power Company (Tepco), facing a bill of multiple billions of dollars and reliant on state support.

Estimates prepared for Energy Fair suggest that if operators had to buy insurance at the market rate, that would add at least 14 euro cents (12p) to the price of one kilowatt-hour (kWh) of electricity -- and potentially 20 times that figure. With electricity in the UK retailing around 12p/kWh, that would mean at least a doubling of the price.

State coffers would also have to meet cost overruns on nuclear waste disposal, they argue.

Energy Fair also says that the UK's carbon floor price and feed-in tariffs amount to state aid for the nuclear industry. "The introduction of a carbon price floor is likely to result in huge windfall handouts of around £50m a year to existing nuclear generators," said Caroline Lucas MP, leader of the UK Green Party.

To see the whole article, click here .

JJS: Not just uranium but fossil fuels, too, get vaults of your public funds.

We distort reality when we omit the health and environmental costs from burning fossil fuels from their prices. When governments subsidize burning, they distort even further. Worldwide, direct fossil fuel subsidies added up to roughly $500 billion in 2010.

Of this, supports on the production side totaled some $100 billion. Supports for consumption exceeded $400 billion, with $193 billion for oil, $91 billion for natural gas, $3 billion for coal, and $122 billion spent subsidizing the use of fossil fuel-generated electricity.

The indirect costs of gasoline, including climate change, treatment of respiratory illnesses, and military protection, add up to $12 per gallon. Adding this to the U.S. average of $3 per gallon brings the true market price closer to $15 per gallon.

Some countries -- Belgium, France, and Japan -- have phased out all subsidies for coal. As oil prices have climbed, a number of countries have had to reduce or eliminate their motor fuel subsidies: e.g., China and Indonesia. Iran, which was pricing gasoline at one fifth its market price, dramatically reduced its gasoline subsidies.

Jan Lundberg of Culture Change critiques: “The implication of comparing fossil fuel supports to much smaller renewable energy subsidies is that ‘the answer’ is a reallocation of money and better legislation. We have seen over the decades that this does not happen.”

To see the whole article, click here .

JJS: Instead of subsidizing energy suppliers, governments should charge them rents for drawing down our common natural heritage. And not just charge for resources but for sites, too, for all kinds of land with exchange value. Let’s funnel that spending into the public treasury then back out again in ways to benefit everyone equally, a sentiment echoed in the UK press.

Pete the Temp (Dec 14): “If you'd like to polish your skills, Occupy London has workshops, talks, and working groups laboring hard to incubate and cultivate practical solutions to the global crisis. I saw a talk here on the land value tax, a campaign that could radically restructure how property and wealth are managed. If you go to St Paul's be sure to find Robin Smith, representative of the radical Systemic Fiscal Reform group from Cambridge. Robin, believe it or not, used to be a Tory councilor.

To see the whole article, click here .


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

Tax loopholes unjustifiable by results

Senate Democrat -- Big oil doesn't need tax breaks

Those Debating Economic Policies, Attention

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