Subsidize or Suffer

Authors

Dallas Smith, University of Nebraska-LincolnFollow

Date of this Version

Fall 12-13-2019

Document Type

Article

Citation

Smith, Dallas. Op-Ed from ENSC 230. Energy and the Environment: Economics and Policy, University of Nebraska-Lincoln, Department of Agricultural Economics, Fall 2019.

Abstract

The standard for energy production and consumption in the US has historically been the use of coal or oil. In the earliest days of the industrial revolution, coal was king. For a society to achieve such a goal as the expansion and fortification of infrastructure, well, society as a whole, the means absolutely justify the ends. But what if the means of producing energy didn’t have to look like what they did over a hundred years ago? Well they don’t. The use of new renewable, sustainable energy could prove to be beneficial in many aspects, environmental health especially. By subsidizing the use of renewables for the purpose of energy production, the state of NE could stand to become a positive influence for the rest of the nation in the fight against climate change. If it isn’t entirely obvious to you by now, the world’s climate is changing due to anthropogenic activities. In other words, we messed up guys. As the ice caps melt and the air turns a stale brown, the “environmental debt” we have dug ourselves into only grows larger and larger. Unfortunately for the earth, economic principles don’t apply and bankruptcy in this case is literally death. To avoid such an event would require a paradigm shift of society, specifically aimed at the energy production sector. Currently, energy production is one of the US markets with the highest rate of subsidies. But that isn’t to say that we are heading in the wrong direction as a society necessarily. The US Energy Information Administration (EIA) reported that in 2010, natural gas received $24B and coal received $21B. In 2016, natural gas received $32B and coal received $14B, a nearly 40% decrease in funding in just 6 years. This is a good sign, it means that we are willing to put our chips into another pile at the very least, and at most means that we are willing to invest in more sustainable fuels – as natural burns slightly cleaner than oil and much cleaner than coal. The fossil fuel industry currently employs millions of people. A shift away from the use of fossil fuels would certainly eliminate these jobs. This could be seen as a negative through the right (or wrong) lens. But that’s not to say that expanding on clean energy wouldn’t make any jobs either. A 2017 report from the Department of Energy shows that nearly 1 million clean energy jobs have been created in the US alone. This number being nearly 5 times that of US fossil fuel workers. By continuing to subsidize the energy industry in the direction of fossil fuels is to cosign on the accelerated heat death of the planet at the hands of the ignorant. But it is not too late! Several regions in the US have or are planning to have economic policies put in place to combat climate change. Currently there is a 30% rebate on solar PV panels at the federal level, which is wonderful for residential and commercial installation. In addition to this, there are currently 14 different financial incentive programs in relation to renewable energy usage. Most of which are locked to specific regions (DSIRE, 2019). In Nebraska there are strong Net metering laws. This means that any energy produced at the household level has to be connected to the collective power grid. This connection could allow for power produced at the individual level to be sold back to the local energy providers. More money doesn’t have to mean a loss in environmental quality! What Nebraska currently lacks is a substantial subsidy for the implementation of renewables. At the individual level this could look like an installation rebate, and at the industrial level it could simply mimic current practices in the fossil fuels industry.