Cutting the federal budget by axing environmentally harmful subsidies and taxpayer-funded programs sounds great, right? The Green Scissors 2010 (PDF) report has identified more than $200 billion in government subsidy programs that are wasteful from a financial and an environmental perspective. The Green Scissors Campaign, which is led by several organizations including Friends of the Earth, Taxpayers for Common Sense, and the U.S. Public Interest Research Group, is focused on generating bipartisan support for cutting federally funded programs that are harmful to the environment.
This year’s report focuses on programs in four key areas: energy, agriculture and biofuels, infrastructure, and public lands. Energy, especially clean energy, is getting attention from the president as the Obama administration is helping push our country towards a green economy. The energy section of the Green Scissors 2010 report targets three main energy industries: oil and gas, coal, and nuclear.
Of course the Gulf oil spill is on everyone’s mind. Although BP has pledged to go beyond the $75 million federal limit on oil cleanup costs, Americans have to rely on BP’s promise and have no legal recourse for damages that exceed this cap. This isn’t an example of wasteful government spending yet, but it could be if taxpayers are left to foot the final BP spill cleanup bill. Changes made to the liability caps may be prudent.
The Green Scissors 2010 report recommends that many of the federal subsidies for oil and gas, coal, and nuclear energy be ended. Nuclear energy projects not only receive tax credits but the industry also gets accident indemnification, and nuclear operators only need to hold a $300 million insurance policy. I don’t know the price of a nuclear accident cleanup, but I imagine it is much more costly than $300 million.
Increasing the minimum insurance requirement could stave of future wasteful spending but eliminating certain nuclear industry subsidies could cut spending now. The report has identified 15 different subsidy areas that could be cut including the nuclear production tax credit, the decommissioning pilot program, and fusion energy research. If these 15 subsidies were cut, taxpayers could save more than $46 billion between 2011 and 2015.
In the agriculture and biofuels section, corn ethanol is feeling the wrath of these advocacy groups. Corn ethanol is a popular political talking point but from a scientific perspective, it doesn’t really appear that corn ethanol is going to be a game-changer in the automotive industry. We’ve tried and we’ve tried some more … but it is not the alternative fuel of the future. Now is the time to start moving some of this funding towards other projects. The report shows that eliminating the Volumetric Ethanol Excise Tax (VEETC), a 30-year-old tax subsidy that primarily benefits the corn ethanol industry, could save taxpayers $36.4 billion between 2011 and 2015.
The report goes on to identify wasteful spending in the transportation sector, including water system projects being managed by the Army Corps of Engineers as well as programs that deteriorate our nation’s public lands. To read more about all four of the sectors being targeted in this new report, download Green Scissors 2010 (PDF).