Green Scissors: An Opportunity to Overcome Political Differences to Address Environmental Issues

Douglas Miller is a senior at the University of Pennsylvania pursuing a double major in Philosophy, Politics, Economics (PPE) and Environmental Studies. At Penn, he founded Green Acorn Business Certification & Eco-Consulting and serves on the board of several sustainability-related organizations.

Green Scissors is a campaign launched by Friends of the Earth (FOE) that seeks to end environmentally harmful subsidies issued by the US Federal government. Green Scissors “strives to make environmental and fiscal responsibility a priority in Washington” [2]. The campaign exposes perverse subsidies and builds “a strong case that the federal government can protect our natural resources, reduce the growth of government spending, and make a significant dent in the national debt” that now amounts to several trillion dollars [2].This campaign has not only been worthwhile and effective for eliminating so-called perverse subsidies, but has been an important example for opportunities to overcome political differences to address environmental problems.

Subsidies come in various forms. More generally, subsidies are a “form of government support extended to an economic sector…generally with the aim of promoting an activity that the government considers beneficial to the economy overall and to society at large” [5]. The three main types include those that provide preferential treatment for a particular sector, encourage a certain activity or process that otherwise would not be pursued, and ensure the survival and stability of strategically important industries.

Perverse subsidies are those that “exert effects that are demonstrably and significantly adverse” for both the economy and environment and display the two following requisites [5]: First, subsidies are economically perverse when they maintain production processes that would otherwise be non-starters, reduce costs so far that natural resources are wasted or overexploited, harm others while attempting to benefit one economic area to the extent that their net impact is negative, and deter efforts at sustainable exploitation, use of cost-saving technology, and improved management [5]. Second, subsidies are environmentally perverse when they foster activities that result in environmental harm (whether at the site in question or farther afield, and come to fruition immediately or later in time), encourage inefficient and often profligate use of fossil fuels and stimulate the development of nuclear energy, foster grand-scale expansion of car culture rather than public transportation, promote inefficient and wasteful use of water, lead to overexploitation of fisheries and forests, generate air pollution, and stimulate practices that degrade the natural resources underpinning agriculture [5].

Perverse subsidies have at least six features in common. First, they induce higher taxes for everyone since they increase government spending. This furthers government budget deficits. Second, perverse subsidies “divert government funds from better options for fiscal support, notably health and education” [5]. Third, they “undermine market decisions about investment, and they reduce pressure on business to become efficient” [5]. Fourth, perverse subsidies benefit an elite few at the expense of the majority of the population. Fifth, they “often serve to pay the polluter” [5]. Sixth, perverse subsidies drive numerous forms of environmental degradation, which imposes intrinsic harm on the environment and acts “as a further drag on economies” [5].

Perverse subsidies confuse the forces of supply and demand by altering actual prices for goods and therefore create a misinterpreted guide – inaccurate prices – for individual decisions. The absence of appropriate prices for scarce resources “leads to their excessive use” and results in market failure [6]. Moreover, perverse subsidies make an already “bad situation worse” [6].

In the Green Scissors 2011 report, perverse subsidies existing in the domain of energy, agriculture, land and water, and transportation are revealed. The 2011 report has identified “more than $380 billion in wasteful government subsidies that are damaging to the environment and harming taxpayers” [2]. These subsidies “make things worse for people and our common home in the natural environment” [4]. The extensive list of the perverse subsidies identified by Green Scissors can be found at the conclusion of this document.

The most notable facet of this campaign in its strategy: Green Scissors “offers a roadmap for how Congress can bridge the gap between ideologically diverse perspectives to begin moving towards deficit reduction in a productive fashion” [2]. The groups comprising the Green Scissors partnership – Friends of the Earth, Public Citizen, Taxpayers for Common Sense, and The Heartland Institute – exemplify this roadmap. Even though these four groups “have different missions, histories, goals and ideas about the role of government,” there exists common ground where they can work together to promote the public interest [2]. Despite their differences, they all agree that it is necessary “to overcome our nation’s budgetary and environmental woes by tackling spending that is not only wasteful, but environmentally harmful” [2]. Green Scissors thus offers a glimmer of hope – in an era riddled with political polarization and rigidity – for the ability of people with ideologically divergent perspectives to come together and promote shared public interests. Moreover, were these groups to work separately their efforts would certainly be less effective.

Green Scissors has achieved various successes. In total, the campaign helped cut $26 billion in perverse subsidies issued by the Federal government since 1994. During the past year, “lawmakers have taken action on a few of the important issues targeted by the Green Scissors coalition” [2]. While hardly any of the changes go far enough in reducing the size of or outright eliminating perverse subsidies, the successes should “serve as a starting point for Congress as it moves forward on repealing environmentally harmful and wasteful spending” [2]. In 2011, Green Scissors’ efforts in exposing perverse subsidies resulted in various policy successes. First, the Senate voted to eliminate the Volumetric Ethanol Excise Tax Credit. While the bill has stalled, the vote suggests that this subsidy will expire at the end of the year without an extension. Second, an amendment to the Agriculture Appropriations bill capped “the amount of any one entity at $125,000” [2]. Third, the House supported an amendment to “stop the Department of Agriculture from providing yet another subsidy for the ethanol industry for blender pumps and ethanol storage” [2]. Fourth, the House of Representatives voted to cancel the bribe used by the US to stop Brazil from enforcing a WTO ruling that ruled US cotton subsidies as trade distorting.  Fifth, the House voted overwhelmingly to “reduce and, over time, phase out the large taxpayer subsidies provided to people who purchase homes in flood prone areas” [2]. There are also signs that other perverse subsidies will be reduced or cut in the near future. This was observed in debates over identifying oil and gas subsidies as potential targets for cuts, as well as debates about limiting the eligibility for commodity payments.

Green Scissors also contributed to policy achievements in 2009 and 2010. The 2009 Congress allowed many perverse subsidies given to dirty industries in each of the previously highlighted categories to expire. This included subsidies given for liquid coal, biodiesel, refined coal, coke, timber logging, existing open-loop biomass facilities, and alternative vehicle fuels. Other successes included the elimination of perverse subsidies for the Yucca Mountain high-level radioactive waste repository, Global Nuclear Energy Partnership, North Shore Road that would have cut through the one of the largest road-less areas in the eastern US, Royalty-in-Kind program which allowed oil and gas companies to “make royalty payments to the federal government in the form of oil and gas rather than cash,” and the Yazoo Backwater Pumping Plant [1]. Royalty rates were also increased by about fifty percent for offshore drilling.

From Window on State Government

Eliminating or sharply reducing perverse subsidies, such as the billions of dollars worth of cuts already achieved by Green Scissors, removes barriers for laying the foundation for a more sustainable economy. Doing away with these subsidies helps shift consumption “sharply away from environmentally harmful products and services and toward those that are easy on the environment” [6]. Moreover, there is a double dividend as perverse subsidies are removed or greatly reduced. First and foremost, the formidable obstacles created by perverse subsidies that hinder sustainable development are removed. Second, “a huge stock of funds available to give a new push to sustainable development” becomes available [5]. Taxpayers also no longer pay a double price, which is the act of paying once for (perverse) subsidies and then paying again for the environmental and economical costs.

Green Scissors should be commended for its ambition and successes. Since its initiation in 1994, the campaign “has helped cut $26 billion in environmentally wasteful from the federal budget” [3]. Green Scissors has thus been successful in making progress towards achieving its clear-cut goal of eliminating perverse subsidies. It has pursued a bold, unconventional strategy to achieve this aim by working with ideologically contrasting organizations in order to find common ground and work together to promote shared public interests. Its objectives also help solve two problems at once: the federal deficit and environmental issues. In so doing, the Green Scissors campaign has not only been effective in helping cut billions of dollars in perverse subsidies from federal spending but has also set a precedent in building a partnership consisting of diverse organizations.

Works Cited

[1] Aurilio, Anna, Michele Boyd, Michelle Chan, Jennifer Cox, Steve Ellis, David Hirsch, Kate McMahon, Jackson Mueller, Karen Orenstein, Erich Pica, Emily Rhodes, Josh Sewell, Severin Skolrud, Michael Surrusco, Justin Yang, and Erich Zimmermann. “Green Scissors 2010: More than $200 Billion in Cuts to Wasteful and Environmentally Harmful Spending.” Friends of the Earth (2010). Print.

[2] Autumn Hanna (Taxpayers for Common Sense), Eli Lehrer (The Heartland Institute), Benjamin Schreiber (Friends of the Earth), and Tyson Slocum (Public Citizen). “Green Scissors: Cutting Wasteful and Environmentally Harmful Spending.” Friends of the Earth (2011). Print.

[3] Friends of the Earth, Taxpayers for Common Sense, Public Citizen, and The Heartland Institute. Green Scissors | Cutting Wasteful and Environmentally Harmful Spending | Green Scissors. Web. 13 Nov. 2011. <http://greenscissors.com/&gt;.

[4] Lehrer, Eli. “Go Green…By Cutting Government.” Interview by Benjamin Schreiber. Washington Journal for Wednesday, September 21. C-SPAN, 21 Sept. 2011. Web. 13 Nov. 2011. <http://www.c-span.org/Events/Washington-Journal-for-Wednesday-September-21/10737424286/&gt;.

[5] Myers, Norman, and Jennifer Kent. Perverse Subsidies – How Tax Dollars Can Undercut the Environment and the Economy. Washington, DC: Island, 2001. Print.

[6] Speth, James G. The Bridge at the Edge of the World – Capitalism, The Environment, and Crossing from Crisis to Sustainability. New Haven: Yale UP, 2008. Print.

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