We all know what happens when government decides to interfere with free markets by subsidizing the production of something that is uneconomical with the subsidies: Taxpayers shoulder the costs and cronyism is the name of the game because subsidies go to the politically connected.
[An important economic: Please don’t call such pork-barrel politics is “crony capitalism.” “Crony capitalism is like liquid ice – an oxymoron. Under capitalism, consumers pick the economic winners and losers among competing businesses, and the state doesn’t interfere with the process. Under socialism, producers produce what the state mandates; thus, the government determines the economic winners and losers. Cronyism, by which the government favors certain producers by subsidizing them, is the first cousin of socialism and not at all capitalistic.]
When it comes to “green pork,” the stated purpose is to offset economic costs with environmental benefits. Unfortunately, in many cases the beleaguered American taxpayer ends up subsidizing production that results in environmental losses in addition to economic losses. This article doesn’t offer a comprehensive critique of green pork, but will focus on the negative environmental impacts of environmentalists’ decades-old hostility to petroleum.
In the late 1970s, President Jimmy Carter steered the government toward the production of synthetic fuels to compensate for the apparent oil shortage. The “apparent” oil shortage was artificial, caused by a combination of government-imposed price controls and the green movement’s opposition to petroleum extraction marring nature’s pristine beauty.
Interestingly, in the ‘70s, greens weren’t overly concerned about the CO2 content of oil, because many of them were worried about global cooling, not global warming. Thus, when Pres. Carter launched the “synfuels” program in 1980, the main focus was how to convert coal (which emits far more CO2 than oil) into a substitute for oil. But the greens should have been skeptical about synfuels because it was well known then that synfuels would “drain away needed water in the West.”
Because of the short life of the federal Synfuels Corporation (it dissolved in 1986, so you know a government program has to be unusually terrible to last only six years!) there was little permanent damage from synfuels production. However, the Synfuels Corporation did lay some groundwork for subsequent government subsidies of ethanol and solar energy.
Ethanol subsidies started in the last two years of the Carter presidency and accelerated during the Reagan years. These subsidies were most welcomed by struggling farmers who benefited from the resulting higher prices of the corn they grew. Enabling farmers to benefit from a green agenda was a shrewd moved. It has made it almost impossible to scrap ethanol subsidies and mandates, because Republicans need the farm vote and Democrats never met a green subsidy that they don’t like.
Unfortunately, though, corn-based ethanol is not environmentally benign. On the contrary (apart from the hotly debated question about whether ethanol production and use results in a net decrease of CO2 emissions, the extra corn that is grown to make ethanol taxes the environment in at least four ways: 1) accelerated depletion of water tables; 2) accelerated depletion of topsoil; 3) increased usage of nitrogen-based fertilizers that drain into waterways; 4) loss of millions of acres of wildlife habitat.
In regard to the first point, an analysis published by Muhlenkamp & Company, Inc., calculated that “shale gas is 14,000 times more water efficient in the production of energy than corn ethanol.” Ouch!
And in regard to the fourth point, some argue that the loss of undisturbed land is overstated, because American farmers are producing much more corn per acre than they were four decades ago. Specifically, the total land area planted in corn has risen from only about 82 million acres per year to about 90 million. What they neglect to say is that with ~40 percent of today’s corn crop being turned into fuel that we burn in our motor vehicles, without the ethanol subsidies and mandates, ~36 million acres would either lie fallow or could be used for other purposes.
Over the past couple of decades, massive subsidies have funded a massive increase in wind and solar energy alongside the ongoing ethanol binge. The environmental degradation caused by these examples of green pork has been is considerable. (Volumes could be written about the exorbitant land use, toxic mineral extraction, widespread destruction of birds and bats, etc., etc.)
The recent Michael Moore/Jeff Gibbs video “Planet of the Humans” shows what a farce greens have perpetrated with their renewable fuels fetish. American economic growth has been held back by the artificially high prices Americans have been paying for “renewable” energy for electricity. Lavish subsidies for uneconomical green energy boondoggles have proliferated (President Obama’s Solyndra being the poster child for such cronyism). And the environment has taken a taxpayer-subsidized beating.
Government pork always makes more political sense than economic sense, but the special tragedy of green pork is that it doesn’t even make environmental sense. What a shame.