Rodney Sobin, of Richmond, penned the following response to my column, “Coping with $60 Oil” (Oct. 31, 2005). As much as it pains me to think that there are people who disagree with me, I thought his comments worth posting on the blog:
Your column makes many good points with which I mostly agree. You are exactly on target in emphasizing energy efficiency. The scope for reducing energy use in transportation, homes, offices, and industry is tremendous, yet Virginia is just about last in the nation in promoting such approaches and the federal effort is anemic at best. And, as is often addressed by Bacon’s Rebellion contributors, Virginia’s land use and transportation policies are sorely lacking in terms of mitigating sprawl, including the automobile and energy intensive lifestyle it engenders.
I also agree with you about the hazards of picking winners. Promoting certain listed technologies often has the unintended consequence of impeding the development and use of other promising technologies or approaches. Instead, policies should promote some target level of performance rather than a particular technology. For example, a tax break or HOV lane access for hybrid cars may benefit someone with an SUV that gets, say, 18 mpg rather than 16. Whoop-de-do. While someone buying a non-hybrid 40 mpg fuel sipper that meets California superultralow emissions standards gets nothing. An incentive based on performance would be technology neutral–if you meet energy and environmental criteria you get the benefit regardless of fuel or engine type. If you have an efficient, clean car, then fine, regardless of whether it burns gasoline, diesel, ethanol, hydrogen, or dung or what type of engine, batteries, fuel cells, or whatever it has.
Where I do quibble with you is on subsidies and tax breaks. I agree with you in principle under close-to-perfect market conditions. But the reality is that conventional fossil energy is highly subsidized, not only in terms of tax breaks and the like but in terms of external costs that are not included in market prices. You and I do not pay for health impacts, agricultural and fishery losses, and ecological damage when we pay at the gas pump or pay the utility bill. Nor do we cover the international political and military costs of oil dependence.
The marketplace is tilted because of these implicit subsidies. For example, using EPA-approved methodologies, it is estimated that 989 deaths, over 1400 heart attacks, and over 23,000 asthma attacks are instigated by power plant emissions annually in Virginia. We don’t pay for these on our electric bills–and the victims are not compensated by utilities or ratepayers. [See http://www.cleartheair.org/dirtypower/ for more.] Another example: About a third of the nutrient pollution in the Chesapeake Bay, contributing to dead zones and other ills, comes from nitrogen oxides emitted by our vehicles, power plants, factories, furnaces, water heaters, and so on.
If the prices of coal, oil, and natural gas derived energy included these and other impacts then there would be a level playing field with solar and wind. But they do not. Therefore, taxes or fees to “correct” prices is justified under free market capitalism. Since “tax” is a dirty word in Virginia, tax breaks or other subsidies may be more palatable even if less efficient from an economic perspective as a means to level the playing field. Also, one can design fiscal policies to assure “revenue neutrality” (i.e., no net tax increase) and to mitigate impacts on the poor, who usually don’t have the means to replace clunkers with hybrids or upgrade furnaces, windows, etc.
It is true that it is difficult to evaluate in dollar terms external costs of health, ecological, and other damage in order to determine an appropriate tax or fee to impose or subsidy to offer. But we do know that these costs are far from zero and that it is better to be roughly right than precisely wrong. Don’t let dirty energy sources get a free ride at the expense of our health and wellbeing, farms and fisheries, ecological balance, outdoor recreation, national security, and other values.
Mr. Sobin works for the Virginia Department of Environmental Quality, but the views do not necessarily reglect those of the DEQ.



