The 10 Least Green Government Subsidies


Urban sprawl, pollution, over-consumption, deforestation…like it or not, U.S. taxpayers are still paying for all of these things to occur in America and beyond. Despite recent investments in green jobs and technology, an array of government subsidies pay big dirty industries like oil, coal and factory farms to destroy the environment in every way possible while greener, healthier industries like solar power and vegetable farms get a pittance.

10. Highways

-When gas prices rose dramatically in 2008, Americans began flocking to mass transit in droves, resulting in declining revenues for the Federal Highway Trust Fund. Naturally, the Bush Administration’s response was to take money from already underfunded mass transit and use it to pay for highways that are already, as Slate put it, “paved with gold”. Billions of dollars are pumped into the highway system every year, which encourages the polluting car culture and leads to further sprawl, while mass transit continues to fall by the wayside.

9. SUVs

-In case you aren’t already taking optimal advantage of the polluting power of our nation’s sprawling web of highways, the government would like to make your impact even greater by setting you up in a nice gas-guzzling subsidized SUV. A portion of the tax code revised in 2003 gives business owners a huge deduction for up to 30% of a large vehicle’s cost, which can add up to $25,000 in the case of a Hummer – far more than the credit given to individual purchasers of energy-efficient vehicles. Attempts to axe this provision in 2007 failed.

You only get the credit if it seats more than 9 passengers or weighs more than 14,000 pounds, but they don’t really care whether your business actually requires such a vehicle. So, by all means, get the Escalade.

8. Paper Mills

-Paper mills cut down trees while sucking up massive amounts of fossil fuels and get big money from the government to do it – all through a loophole in a law that was supposed to benefit renewable energy. A law enacted in 2005 contains a section that gives businesses an incentive to mix alternative energy sources with fossil fuels. To qualify for the tax credit, paper companies started adding diesel fuel to “black liquor”, a pulp-making byproduct that they were already using to generate electricity on its own.

But time might be running out for this egregious misuse of taxpayer money: the unemployment extension bill approved by the Senate and on its way to the House would eliminate this loophole and use the funds for health care. (Editor’s note: We’ve contacted both the editor and writer of this story at BusinessWeek to confirm that this loophole will still be closed in the bill just passed by the Senate, and will update if more information becomes available. In the meantime, there’s this resource which seems to confirm the loophole is in fact being closed.)

7. Commercial Fishing

-About half of the $713 million in subsidies given to the U.S. fishing industry directly contributes to overfishing, according to a new study by the Environmental Working Group. The subsidies – which equal about a fifth of the value of the catch itself – lower overhead costs and promote increased fishing capacity, meaning more fish are caught than can be naturally replaced.

Overfishing is a huge environmental problem – up to 25% of the world’s fishery stocks are overexploited or depleted, according to the UN’s Food and Agriculture Organization.  But that’s not the only result of the subsidies; because roughly half of the money goes toward fuel costs, other consequences include wasteful fuel consumption as well as air and water pollution.

6. Nuclear Power

-The nuclear industry’s decade-long, $600 million lobbying effort finally paid off as President Obama agreed to grant loan guarantees for nuclear power plants.  Obama has been promising since the early days of his campaign that he would find a way to “safely harness nuclear power”, but the $55 billion taxpayer-backed loan guarantees are going forward despite continued reservations about uranium mining and the storage of radioactive waste.

5. Factory Farming

-American factory farms are literally filthy cesspools of their own making, and who else is cleaning up all that shit but American taxpayers? Giant factory farms make up just 2% of the livestock farms in the U.S. yet raise 40% of all animals in the U.S., and they do it using practices that are not only harmful to workers and the animals themselves, but to the environment.

The government heavily subsidizes factory farms so they can provide über-cheap meat and dairy, raising as many animals as possible in the shortest amount of time with the least amount of care. And why should they care about finding better ways to manage manure when the government hands them $125 million annually to “deal” with the consequences, and then doesn’t bother to check up on them?

Despite the backwards funding given to clean them up, gaping lagoons of livestock waste packed with pollutants continue to be one of the biggest environmental problems in America, fouling our water and causing those depressing dead zones in our oceans.

4.  Corn Ethanol

-In the quest to beat back fossil fuels, cleaner fuels that we can grow seemed like a good idea – until we realized that some, like corn, make a huge dent in the world’s food supply. But that isn’t stopping the U.S. government from giving billions in subsidies to the corn industry in general, and corn ethanol in particular.

Corn-based ethanol gobbled up 76% of federal government renewable energy subsidies in 2007, leaving little for more environmentally sound renewable energy sources like wind and solar. Worse yet, it’s a huge drain on water resources, gulping down up to 2,138 liters of water per liter of ethanol.

This isn’t just an unwise investment – it’s also destroying the rainforest. As American farmers have abandoned soy for subsidized corn, soy prices have risen worldwide – and led to an increase in Amazon deforestation. Brazil is the world’s second-largest producer of soy next to the U.S., and growing demand has meant more clear-cutting for soy plantations.

3. Processed Foods

-Ethanol isn’t the only product that comes to us courtesy of U.S. corn subsidies. There’s also plenty of craptastic processed “food” products packed with multiple subsidized ingredients: wheat, sugar, soy and of course, corn. Gee, could the obesity epidemic have anything to do with the fact that our government makes junk food cheap, and encourages its consumption through the food stamp program?

It’s a sad state of affairs when a Twinkie costs less, calorically speaking, than a carrot. Meanwhile, farmers who produce fruits and vegetables (aside from corn), don’t get a dime in government subsidies. While the government is considering junk food taxes, a change to the Farm Bill might be more efficient.

2. Coal

-You would think that the coal industry’s long-held dominance of the American energy market would have eliminated the need for subsidies. After all, the industry spent $47 million last year on PR alone. But the fact is, coal companies are milking the government for all it’s worth while continuing to pump greenhouse gases and carcinogens into the air and turn the Appalachian Mountains into post-apocalyptic hellholes.

Coal subsidies have survived this long because of the industry’s staggering influence on lawmakers, and because constituents in coal states often fear the economic repercussions of a scaled-back coal industry more than they fear the harm to their health and homes. And on top of the federal coal subsidies lumped in under “˜fossil fuels’, the industry gets untold breaks on a state and local level in places like Kentucky, where the coal industry netted $115 million in subsidies in 2006.

1. Oil

-Climate change: brought to you by the U.S. government! According to a study by the Environmental Law Institute, fossil fuels received over $70 billion in subsidies between 2002 and 2008, while traditional sources of renewable energy were given just $12.2 billion.

But the oil industry won’t even admit that the direct spending and tax breaks they get are subsidies – they prefer to call them “incentives”, and claim that attempts to roll back some of those subsidies are actually “new taxes”.

As Grist notes, the ELI report is actually pretty conservative – it didn’t include things like military spending to defend oil in the Middle East or infrastructure spending. But the fossil fuel industry’s free ride is almost over: President Obama’s new federal budget proposal wipes out these breaks and increases funding for clean energy research (and, unfortunately, nuclear power).

Photo credits: The following photos are from Flickr and licensed for commercial use under Creative Commons: “Freeway” by Payton Chung; “SUV” by The Car Spy; “Paper mill in Washington State” by Jan Tik; “Fish face” by Andy Welsh; “Nuclear reactor” by Intamin10; “Factory farm protest sign” by johnnyalive; “Corn” by normanack;  “Coal” by Duncan Harris; “Oil rig” by kenhodge13.

Stephanie Rogers

Stephanie Rogers currently resides in North Carolina where she covers a variety of green topics, from sustainability to food.