ENVIRONMENT:

Coal and Fossil Fuels: The Horse and Buggy of Our Time

by Jonathan Pearson,
Chesapeake Climate Action Network

"Progress inches along, stalled and delayed in part with your tax dollars, which are used to help prop up the fossil fuel industry and support a competitive advantage over modern and cleaner forms of energy."
During a public hearing in Annapolis before the House Ways and Means Committee on repealing a multi-million dollar tax break for the utility and coal industries, one lawmaker who questioned concerns about current health and clean air impacts, sarcastically suggested that maybe we should return to "the horse and buggy days."

Well, if the horse and buggy industry were as politically entrenched and connected at the beginning of the 20th century as big coal and utilities are today, who knows? Maybe our morning traffic report would be warning travelers to "avoid the inbound JFX because of a four stallion pileup!"

That's not the case and we have progressed beyond earlier modes of transportation. That progress undoubtedly caused adjustments in regional economies, with shifting production and employment patterns. Yet we overcame these challenges so that today virtually everyone would agree there's no desire to turn the clock back on transportation.

Which brings me back to energy. In these early days of the 21st century, it is coal and other fossil fuels which are becoming the "horse and buggy" of our time.

Progress inches along however, stalled and delayed in part with your tax dollars, which are used to help prop up the fossil fuel industry and support a competitive advantage over modern and cleaner forms of energy. Much attention has been given to the federal government, where fossil fuel subsidies have been doled out for nearly a century, with billions of taxpayer dollars given away each year.

However, as that recent hearing in Annapolis pointed out, subsidies come at the state level too.

"The coal industry claims that because other states offer subsidies to their coal industries, Maryland has to do the same to remain competitive. While a parent might expect an 'everybody's doing it' argument from a child trying to justify cheating on a test or underage drinking, it is not a worthy argument for setting rationale, equitable tax policy."

First is a provision in the Maryland Tax Code giving utilities a $3 tax credit for every ton of Maryland-mined coal which is purchased. That may not sound like much, but it adds up quickly. This subsidy costs the state an estimated $15 Million each year in lost revenue. Factor in additional costs which impact you as a taxpayer or ratepayer (such as monitoring and cleaning up abandoned mines, rising rates of respiratory disease, and societal and infrastructure costs related to the growing threat of severe climate disruption), and the price tag jumps exponentially.

The industry response is primarily two-fold. First, because other states offer similar subsidies to their coal industries, Maryland has to do the same to remain competitive. While a parent might expect an "everybody's doing it" argument from a child trying to justify cheating on a test or underage drinking, it is not a worthy argument for setting rationale, equitable tax policy. This is especially true when we're talking about a product that has the potential to cause harm.

Had states taken such a "wait and follow" approach with tobacco, we would still be exposing our citizens to second-hand smoke in the workplace. To the contrary, states acting to curb the harmful effects of tobacco have more recently been engaged in a public health and public policy "race to the top." We can and we must do the same in regards to fossil fuels.

See “Moloch Smiles Again” for what the CDC says about the hideous dangers of mercury pollution, produced by coal-fired electric generating plants.

Second is the justifiable concern about losing jobs. The only problem: during the nearly twenty years this subsidy has been on the books, coal mining jobs continue to plummet. The Federal Energy Information Administration reports Maryland had dropped to 589 coal mining jobs in 1990, two years after the tax break began. In 2002, jobs had declined further to 511. This decline is more significant, because employment figures for 2002 include industry office workers in the count, while the 1990 figure did not. Meanwhile, the Maryland Labor Department projects a further 20% decline in coal industry jobs during the next decade.

These job losses can be recovered if we engage in the exciting potential of high paying manufacturing jobs in the renewable energy industry. A new report by the Maryland Public Interest Research Group says Maryland is well positioned to be a leader in the renewable energy industry, providing hundreds of long and short term jobs.

Clean energy alternatives that don't pollute our skies and devastate our lands are surely a good vision for Maryland. In setting direction for our state, should lawmakers promote tax policies that move toward equity, or provide preferential treatment to an industry that has been operating since the horse and buggy? Should we move towards cleaner and safer forms of energy, or prop up polluters?

Unfortunately, these questions remain with us, as repeal of the coal tax subsidy did not garner Ways and Means committee support. When it comes to equitable tax policy for fossil fuels, we are still waiting for a much needed breath of fresh air in Annapolis.


Jonathan Pearson is a Program Coordinator with the Chesapeake Climate Action Network in Takoma Park Maryland (chesapeakeclimate.org)



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This story was published on April 16, 2004.