The Fallacy of Renewables

Capitalism Magazine ^ | 7 July 2002 | Willie Soon and Sallie Baliunas

[the bottle let me down]

I don't understand why hydroelectric power is not considered "renewable."

Hydro is not renewable from the envro viewpooint because it requires dams and reservoirs. Part of the long term enviro agenda is to breach the dams and drain the reservoirs so that the rivers can flow "free" as they used to. (In this case, long term may not be so far off. Clinton's Sec'y of the Interior, Bruce Babbit approved and presided over, to great fanfare, the breaching of at least one dam. Other dams have been removed in various parts of the country.)

Never mind that these actions ignore the flood control aspects of many dams. They enviros also ignore the use of reservoir water from drinking and irrigation.

Actually, I shouldn't say that they ignore these uses. It's just that the enviro crowd doesn't much like mankind and would be happy if there were many fewer of us, packed into cities, taking public transit and never despoiling their pristine natural settings.

In any event, if hydro counted as renewable, it would make it harder to remove the dams.

[heleny]

Aha! Thanks for the explanation. In the future, maybe we'll have to take down windmills and tall buildings, for they might obstruct the free flow of sacred winds, and emergency dykes might be banned, too, since floodwaters must not be impeded!

[E. Pluribus Unum]

They lobby to make a living where they can because they can't make a living off of growing food. Here is some information on the farm bill. Pay attention to page 6.

I read page 6. Mostly it says that farm subsidies aren't encouraging overproduction. I don't see how that is supposed to comfort me. That's like saying welfare isn't encouraging unemployed people to work too much.

Two-thirds of all farm subsidies go to large farms and wealthy agri-businesses, most of which earn more than $250,000 a year. Among the landed gentry on the agriculture dole: 14 members of Congress, 15 Fortune 500 companies, and celebrities such as Sam Donaldson and Ted Turner. These mega-corporations and multi-millionaires will rake in as much as 160 times the median annual farm subsidy of $935.

Farm subsides grew from $6 billion in 1996 to $30 billion in 2000. Advocates of the current farm bill say they're just trying to help struggling family farmers. But they could do that far more cheaply. Congress could guarantee every full-time farmer a minimum income of 185 percent of the federal poverty line ($32,652 for a family of four) for "only" $4 billion per year -- one-fifth the cost of direct subsidies in the new bill.

Most House members have at least one major crop in their district grown by farmers who vote, and control of the Senate (which over-represents rural populations) will depend on several close races in farm-heavy states.

Farm subsidies represent little more than political payoffs, with both parties bidding for the "farmer's friend" label heading into the November elections.

[farmfriend]

I saw your post the first time around. I don't believe you numbers are correct but I'm right in the middle of some family business and may not be able to get back to this. Give me time. Mean while go back and reread that stuff.

[E. Pluribus Unum]

I don't believe you numbers are correct...

Take it up with the Heritage Foundation.

[farmfriend]

How do they compare to the numbers that are on the link I gave you?

[E. Pluribus Unum]

How do they compare to the numbers that are on the link I gave you?

I refuted your argument. If you are too lazy to refute mine, then I win.

[farmfriend]

I refuted your argument. If you are too lazy to refute mine, then I win.

Sorry, my family comes first. You don't win you are just on hold.

[E. Pluribus Unum]

Sorry, my family comes first. You don't win you are just on hold.

Here is the article from American Heritage. It is only available in Google's cache, and I dont' want it to disappear. I am very interested to see if you have any rationale rebuttal. My suspicion is that you or one of your relatives is getting a farm subsidy, and as long as you or yours are getting their thirty pieces of silver it perfectly fine by you for the government to steal from others to give to you.

Distributed nationally on the Knight-Ridder Tribune wire

Saving the Poor Rich Farmers

By Brian Riedl

They may call it "farm legislation." In reality, what Congress is sending President Bush amounts to a new welfare bill -- and one with a hefty price tag.

Once it's signed by the president, it will, along with last year's crop insurance bill, provide farmers with a record $191 billion in direct federal subsidies over the next decade. (And that's the least it would cost. New government estimates show the total could be much higher.)

But that isn't the only expense. The bill continues several price-support programs that greatly inflate certain food prices. These programs would cost consumers $271 billion, bringing the total cost of farm policy to $462 billion. That's more than what Congress expects to spend on K-12 education and environmental protection -- combined -- over the next 10 years. That breaks down to an average of nearly $4,400 per tax-paying household.

Worse, two-thirds of all farm subsidies go to large farms and wealthy agri-businesses, most of which earn more than $250,000 a year. Among the landed gentry on the agriculture dole: 14 members of Congress, 15 Fortune 500 companies, and celebrities such as Sam Donaldson and Ted Turner. These mega-corporations and multi-millionaires will rake in as much as 160 times the median annual farm subsidy of $935.

In fact, recent studies by the government's own auditors have shown that farm subsidies are America's largest and most expensive corporate welfare program.

Why have farm subsides grown so much -- from $6 billion in 1996 to $30 billion in 2000? Because of how they were designed. Farm subsidies are supposed to compensate farmers for low prices caused by overproduction, but to receive more subsidies, farmers must plant more crops. This leads to more overproduction, which drives prices down further and induces calls for even larger subsidies.

Then, while paying these farmers to grow more crops, the federal government turns around and pays other farmers not to farm 40 million acres -- the equivalent of idling every farm in Ohio, Indiana, Michigan and Wisconsin.

American consumers get stuck with the bill, of course. They're forced to shell out as much as three times the market price for some foods and foot the bill for export subsidies so that consumers in other countries can buy our food for less than Americans themselves pay.

Perhaps the most nonsensical of all farm programs is the federal dairy program. In the 1930s, when most of the nation's milk was produced in the Midwest, policymakers worried that milk would spoil during the long train ride to the coasts. So to encourage milk production on the coasts, Congress mandated that the price dairy farmers receive (and consumers pay) would be fixed at levels that increased the further away you got from Eau Claire, Wisconsin.

Today, however, the dairy capital of America is California, not Wisconsin. Milk no longer travels cross-country by train, and 70 years of technological innovation have decreased travel times by leaps and bounds. Yet this Depression-era policy still adds as much as 20 cents to the price of a gallon of milk.

Advocates of the current farm bill say they're just trying to help struggling family farmers. But they could do that far more cheaply. Congress could guarantee every full-time farmer a minimum income of 185 percent of the federal poverty line ($32,652 for a family of four) for "only" $4 billion per year -- one-fifth the cost of direct subsidies in the new bill.

So why would lawmakers, who are already having a tough time funding the war on terrorism, homeland defense and the exploding costs of Social Security and Medicare, throw so much money at counterproductive farm subsidies for people who don't need them? Because most House members have at least one major crop in their district grown by farmers who vote, and control of the Senate (which over-represents rural populations) will depend on several close races in farm-heavy states.

In that context, farm subsidies represent little more than political payoffs, with both parties bidding for the "farmer's friend" label heading into the November elections. No one -- including President Bush, who has promised to sign the bill -- is putting sound policy before irresponsible politics. If the president fails to veto it, we'll know that his talk of restoring fiscal sanity to Washington is nothing more than talk.

###

Brian Riedl is the Grover M. Hermann fellow in federal budgetary issues at The Heritage Foundation (www.heritage.org), a Washington-based public policy research institute.

05/08/02

         

---

 
The Heritage Foundation is committed to building an America where
freedom, opportunity, prosperity and civil society flourish.
© 2001 The Heritage Foundation.
214 Massachusetts Ave NE | Washington DC 20002-4999 | ph 202.546.4400 | fax 202.546.8328 | Read Privacy Statement.
Have a question? Ask Heritage at http://www.heritage.org/search/.

The Heritage Foundation is a Member Organization.

[E. Pluribus Unum]

The Cato Institute's Farm Subsidy Analysis.

Excerpt:

"There is little justification for the special hold that the agricultural industry has on tax- payers' wallets. Other industries, such as the high-tech industry, are also risky and subject to large price swings but do not receive large-scale government subsidies. Moreover, farm households have higher incomes, on average, than do nonfarm U.S. households, and subsidies are skewed toward the largest and wealthiest farm businesses. Farm subsidies also subvert their own goal: farmers demand subsidies because of low market prices for their products, but subsidies themselves contribute to lower prices."

[jackbill]

I don't understand why hydroelectric power is not considered "renewable."

I don't think that the article states that hydroelectric power is not considered "renewable". It does imply that hydroelectric power is the only renewable power that is affordable.

[heleny]

The article uses the term renewable in the non-hydroelectric renewable sense, falling into the categories of "biomass (e.g. ethanol), fuel cell, wind, solar, and geothermal."

The article does not specifically say that renewables exclude hydroelectric power, but every mention of credits or requirements for the development of renewables is for non-hydroelectric sources, and the entire article is about non-hydroelectric renewable energy.

According to the DOE's Energy Information Administration (EIA) statistics, renewable energy, excluding hydroelectric power, accounted for no more than 2% of America's electricity generation capacity for year 2000.

The proposed requirements for 20% of electricity to be produced by renewable sources (by 2017, and recently signed into California law by the baron of blackouts) excludes hydroelectric power from being counted as "renewable."

[jackbill]

Perhaps I am reading something into the article but it seems to be saying or implying (or should be more explicit about):

1. Hydroelectric power is among renewable sources.

2. In increasing the use of "renewables", there ain't going to be much if any construction of hydroelectric power generators (in fact aren't some of the environmentalists trying to tear down some of the dams?).

3. Therefore we will have to rely on "renewables excluding hydroelectric".

4. And they ain't cheap. Most, if not all, cost more than they are worth.

As for Grayout Davis, if his 20% renewables exclude hydroelectric, it may just be because he recognizes that there aren't going to be any.

[heleny]

Yes, you're right that hydroelectric power is renewable, that other renewable sources are not cost-effective, and that it is difficult to build more hydroelectric plants.

The new law in California specifically excludes new hydroelectric power from counting toward the 20% requirement, although it allows power from existing hydroelectric power plants to be counted.

SB1078 amends Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code with (among pages of other requirements) Article 16, 399.12 (a)(3):

A new hydroelectric facility is not an eligible renewable energy resource if it will require a new or increased appropriation or diversion of water under Part 2 (commencing with Section 1200) of Division 2 of the Water Code.