Energy and Environment: Higher Prices, No Benefits

Max Borders
Policy Analyst


The recently completed two-year budget cycle (2007-08) was marked by legislation that will make energy more expensive and do little, if anything, to protect the environment. The following highlights some of the major things our General Assembly did and didn’t do over the biennium:

What They Did

Do green subsidies in North Carolina create jobs? I am reminded of a quote by Rep. Prior Gibson (D-Anson), who said: “I’m positive it’s in our best interest to keep XYZ company with 1,000 jobs, even if they’re making buggy whips.” So it’s good to create jobs by taking tax revenue from you and me to shower on companies that make things people don’t value? Staggering logic. Let’s see if we can apply it: Perhaps we should start building pyramids? A temple to Randy Parton? How about we hire teenagers to break windows on Main Street, then hire glassmakers to fix them? Won’t all these activities “create jobs”?

Raised the costs of home energy via a bill mandating “renewables”
SB3 – legislation requiring energy companies get a certain percentage of their portfolios from renewable sources – will do nothing for the environment, but will jack up energy bills and enrich special interests. Major energy concern Progress Energy just got approval to raise energy rates by 16-plus percent – barely a year after the passage of SB3. Consumers are harmed.

Raised taxes on waste disposal, made failure to recycle a criminal offense
Not only will it be more expensive for the average citizen to dispose of waste, business-owners who fail to recycle are now looking at jail time. SB 1492 adds taxes and fees to waste disposal, but creates artificial scarcities by making it virtually impossible to open a new landfill in the state. The state will use revenues from trash taxes to fund recycling.

Handed out green corporate welfare and green boondoggles
Over the past two budgets, the General Assembly has given out millions in green corporate welfare. Examples include zero-percent interest loans for “green” businesses, $2.2 million for a biofuels company, $1 million to a “green business fund” and $5 million to a biofuels center. Biofuels like ethanol drive up food prices and do more environmental harm than good. Such companies are special interests that could not exist but for subsidies and handouts.

Used non-voter-approved debt for “open space” and waste water
The “Land for Tomorrow” fund will disburse* $50 million in state debt not authorized by voters (COPs) — debt saddled to the backs of N.C. taxpayers — purportedly to preserve open space. Half of the $1.45 billion spent by N.C. Conservation Trust Funds between 1987-2007, however, has gone to local wastewater treatment—a questionable expenditure given that these are offered under the rubric of environmental conservation. The state land purchases mean taxpayers will pay more for land management and property values will go up artificially in urban areas.

*Corrected from an earlier version.

Gave us draconian drought management
The Legislature (via HB 2499) gave new drought/water management powers to the state in 2008, which authorizes the Governor to set water restrictions statewide. This policy unnecessarily centralizes water-management policies, when local policymakers should employ their own measures.

What They Didn’t Do

Pressure Washington to lift the offshore drilling moratorium
In the face of high gas prices, the General Assembly took no action to enable offshore drilling – a policy that would bring jobs to eastern N.C. and relieve pressures on citizens hurt by fuel prices.

Pressure Washington to lift the ban on new nuclear plants
True leadership in North Carolina would require the General Assembly demand that Washington change its policy on the expansion of nuclear power in our state. Nuclear power is safer and more effective than ever before. Yet – in the face of soaring energy prices – the Legislature remained flatfooted on lifting the current ban on new nuclear facilities.

Lift a finger to suspend onerous regulations creating boutique gasolines
No legislation was introduced to suspend or repeal state-level legislation creating boutique gasoline blends in certain areas. These gas blends have marginal, if any, environmental benefit and only add to costs at the pump.

End corporate welfare associated with biofuels
Nationwide, there has been a sea-change in opinion about ethanol and biofuels. Not only do biofuels increase food prices, but they have no measurable effect on global warming, they do more damage to the air and land than gas, and biofuel subsidies destroy wealth in other sectors. Though biofuels are a terrible idea, the General Assembly continues to give handouts to biofuels companies.

Make system-wide upgrades to our transportation network
Efficiencies in our transportation network add up to fuel efficiencies, because people don’t sit in traffic as long. And yet the 2007-08 biennium was an example of status-quo transportation policy. In other words, there is heavy investment in roads built in rural areas and underinvestment in infrastructure where the vehicles actually travel—all due to the continued use of the outmoded Equity Formula, introduced in 1989.

This article was posted in Environment by Max Borders on September 3, 2008 at 9:22 AM.

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