R Street, along with our friends and allies at Friends of the Earth and Taxpayers for Common Sense, have put out a new letter on tax extenders as part of our efforts within the Green Scissors Coalition. It’s a good letter and part of a coalition in which we’re proud to take part. But it only represents part of our views.
Our view is simple and principled: we’re against all energy production and activity subsidies. We’re against things that benefit fossil fuels in particular (a view that many environmental groups share) and equally against things that benefit trendy renewable fuels (a view others on the right share).
In some ways, this isn’t a very unusual position. Nearly every expert we’ve ever talked with—conservatives and progressive, those involved with fossil fuels and those involved with renewable ones—agrees that getting rid of all subsidies is a good idea. Even ardent subsidy supporters simply fall back on an argument that the subsidies are a necessary evil to “level the playing field” for a limited time.
The problem is that subsidies insulate technologies from the market and make sure the playing field never becomes level. Fossil fuels have enjoyed certain tax benefits for a century or more and many renewable subsidies are almost a quarter-century old. Adding more subsidies won’t help. Markets solve things. More interference won’t and can’t.