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An Earth Day Call to End Polluter Welfare

The End Polluter Welfare Act takes aim at a definitive list of federal subsidies for polluting industries, targeting everything from mega-tax breaks and giveaway leasing to government R&D programs and loan guarantees.
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Here's an Earth Day calculation: If we ever want to stop burning fossil fuels, we need to stop subsidizing the giant corporations doing the burning. That's the gist of the End Polluter Welfare Act, a bill Senator Bernie Sanders (I-Vt.) and Representative Keith Ellison (D-Minn.) are sponsoring this Earth Day.

We clearly need the help. While renewable energy struggles for temporary and comparatively tiny incentives, billions worth of permanent subsidies are gifted every year to the industries driving our climate over the cliff. For years, this has been accepted as the status quo -- and for the sake of our climate, that needs to change.

Would you believe that the Department of Energy is still co-signing loans for boondoggle projects that pretend coal can be clean? Or that the Department of Transportation is still handing out grant money to oil train operators, essentially subsidizing the unsafe cars that killed 47 people in Lac Megantic, Canada? Or that Congress is still shoveling billions into the pockets of oil, gas and coal interests, ensuring that these companies remain some of the most under-taxed in our entire economy?

The Sanders-Ellison bill would put an end to these giveaways and many others. The End Polluter Welfare Act takes aim at a definitive list of federal subsidies for polluting industries, targeting everything from mega-tax breaks and giveaway leasing to government R&D programs and loan guarantees. At a time when programs that protect people and the environment are being cut to the bone, it would net over $135 billion in savings over the next decade.

These are just a couple of the biggest reforms the act covers:

  • End tax breaks. Big Oil and King Coal are no strangers to corporate welfare. For over a hundred years our tax code has been sending them free money to pollute. There are accounting gimmicks that make it easier to hide profits, special deductions that lower the cost of drilling and even obscure rules that can make cleaning up after oil spills a major tax windfall. The result is a double-whammy of unfairness: Taxpayers who don't have fancy deductions end up having to pick of the slack, and the planet suffers because a destructive activity becomes artificially cheaper. Closing these loopholes would raise much-needed revenue and make climate-disrupting energy supplies less economical.

  • Transportation. Making it cheaper to get oil, gas and coal from one place to another -- either for export, refining or to burn for power -- goes a long way towards padding corporate profits. That's why the End Polluter Welfare act would make it impossible for the Department of Transportation to give loans or grants to projects that support the rail transport of oil and coal. It would also end tax breaks for natural gas distribution lines and special business structures that make it easier for many pipeline companies to raise capital.
  • Reform royalties. Some of the most abundant fossil fuel reserves are in public lands and waters, and very often these minerals are leased away at prices far below fair market value. Under certain provisions for "royalty relief," these resources are even sometimes free to fossil fuel companies. The bill would close this loophole by raising the royalty rate on coal, offshore oil and gas, and by ending the authority of the Department of the Interior to grant royalty relief.
  • Stop fossil-centered R&D. The Department of Energy boasts an Office of Fossil Energy Research and Development. Its sole purpose is to make mature industries, like oil, gas and coal, more profitable by funneling tax dollars into research innovations. Among its most dubious accomplishments is supporting the research that made the current fracking boom possible. The End Polluter Welfare Act would permanently shutter the department and put an end to government funding for easier fossil fuel extraction.
  • This Earth Day, climate policy hangs on a fairly simple question: How do we keep it in the ground? Between two-thirds and four-fifths of the fossil fuel reserves we already know about can never be burned. There's a lively debate on the best way to do this, from executive orders banning extraction to carbon taxation and divestment, and some combination of these solutions is probably the path forward.

    But one of the easiest first steps? Stanching the flow of subsidies to the industries driving the crisis. Forcing polluters to pay their fair share raises revenue for much-needed social programs, protects our air and water, and makes the cost of burning carbon a little closer to the true costs of the damage it inflicts. Keeping dirty energy in the ground means keeping polluters off of corporate welfare.

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