In the News

When the Obama administration moves forward with stronger environmental protection, some see a “phony theology” at work. But most thoughtful observers see a moderate administration steering a middle course, irritating businesses with increased protections when they are cost-benefit justified, but also frustrating environmentalists with a relatively slow pace of change.

Two recent pieces raise the question of whether The Economist is falling into the alarmist’s trap. One accuses the Obama administration of over-counting benefits and the other frets that too many regulations are crushing the American economy.

While any major change to our nation’s transportation model is currently floundering on Capitol Hill in the form of a massive transportation bill being used as a political football, it’s still possible for the president to slowly change the way we get around in this country. He can do this by exercising some of his regulatory power, something he has tried to do by raising the fuel economy standards of America’s automotive fleet.

Mike Livermore, executive director of the Institute for Policy Integrity at New York University, said the offer from electric utilities is not surprising, because they do not benefit as much from the remaining subsidies as some other industries do.

But while there is broad support in theory for a plan that streamlines the tax code and gets rid of provisions that “pick winners and losers,” that comity will disappear as soon as Congress takes a serious look at making certain companies pay more than they do under the current tax code, he said.

Livermore expects a battle royal between some energy companies — such as coal, oil and gas producers — and those that lack the same portfolio of tax breaks. One question is whether heavy-hitting utilities will line up against their compatriots in the energy industry, or sit on the sidelines during what could be a bruising political battle.

“Energy producers are going to fight tooth and nail for their provisions,” he said. “Everyone else is going to moderately want a tax break, but the question is how hard they’re willing to fight for it.”

No doubt about it, “it’s going to be a fight,” he added. “We’re not going to hold hands and sing Kumbaya and figure it out.”

There’s a lot of uncertainty around exactly how much taxpayer money the government gives out to Big Oil, Big Coal and the rest of the dirty energy industry each year in subsidies. But we know one thing for sure: it’s a lot. A new crowdsourced project called the Energy Tax Breaks Wiki promises to help identify the sections of the tax code containing these outrageous fossil fuels subsidies.

The Institute for Policy Integrity just rolled out an “energy tax breaks wiki” that will attempt to log every tax subsidy provided to the fossil and renewable energy industries. With all the political hand-wringing over permanent tax credits for oil companies, short-term tax credits for clean energy that are set to expire, and the differences between the government support provided to both sectors, this is a very important resource for helping uncover the opaque world of energy tax law.

President Obama has made tax breaks for the oil industry an ongoing target. He recently reaffirmed his stance in his State of the Union address, saying that our nation has supported these companies for long enough. And as budget season begins next week, we’ll likely see the idea come up again in deliberations over where to cut.

The Institute for Policy Integrity, a non-partisan advocacy organization and policy cost-benefit analysis think tank sponsored by the New York University School of Law, is seeking expert contributors for a wiki recently launched to evaluate the actual cost of energy tax credits and how the credits impact applicable businesses.

“We can’t make smart tax policy with respect to energy development until we at least know what’s going on,” said Michael Livermore, executive director of the Institute for Policy Integrity. As many in the ethanol industry have discovered during the past year’s energy subsidies debate, it is difficult to pinpoint the precise amount of tax credits that are being provided to one specific energy sector, and even more difficult to determine how the tax credit affects the industry’s performance.

So how does Exxon get away with paying such a relatively low rate? Along with other oil companies, it enjoys the rather generous tax breaks and subsidies the federal government—and the American taxpayer—sends its way. The Institute for Policy Integrity has set up a new Wiki that reveals information about many of these breaks, and how much money they help oil companies save.

President Obama’s state of the union address said a surprising amount about energy and the environment in a year where a sour economy is still his worst electoral enemy. That’s an encouraging sign, especially since opponents have been attacking him on some of his green-related decisions.

His speech was mostly focused, as expected, on job creation. The nation’s employment situation continues to be the biggest economic fallout from the economic crisis that began in 2008. For both political and policy reasons, the President is right to train his laser of attention onto getting people back to work.

In Tuesday’s State of the Union address, President Obama is likely to focus heavily on economic growth and job creation. But he should also make clear that economic progress need not come at the expense of the environment; to the contrary, the public-health efforts he’s made over the past year will generate billions of dollars in value for the American public.