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Governments Giving Fossil Fuel Companies $10 Million a Minute: IMF May 19, 2015

Posted by rogerhollander in Energy, Environment.
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Roger’s note: this sentence says it all: “governments worldwide are spending $10 million every minute to fund energy companies—more than the estimated public health spending for the entire globe.”

by

Energy companies receive $5.3 trillion a year in funding from governments worldwide, says financial powerhouse

 

fossilfuels

Governments are failing to properly tax fossil fuel consumption, with enormous environmental costs, the IMF reports. (Photo: Andrew Hart/flickr/cc)

The fossil fuel industry receives $5.3 trillion a year in government subsidies, despite its disastrous toll on the environment, human health, and other global inequality issues, a new report by the International Monetary Fund (IMF) published Monday has found.

That means that governments worldwide are spending $10 million every minute to fund energy companies—more than the estimated public health spending for the entire globe, IMF economists Benedict Clements and Vitor Gaspar wrote in a blog post accompanying the report (pdf).

“These estimates are shocking,” Clements and Gaspar wrote. “The number for 2015 is more than double the US$2 trillion we had previously estimated for 2011.”

Subsidies occur in two ways, IMF Fiscal Affairs Department directors Sanjeev Gupta and Michael Keen explained in a separate blog post published Monday:

[P]re-tax” subsidies—which occur when people and businesses pay less than it costs to supply the energy—are smaller than a few years back. But “post-tax” subsidies—which add to pre-tax subsidies an amount that reflects the environmental, health and other damage that energy use causes and the benefit from favorable VAT or sales tax treatment—remain extremely high, and indeed are now well above our previous estimates.

The damages from energy use include “premature deaths through local air pollution, exacerbating congestion and other adverse side effects of vehicle use, and increasing atmospheric greenhouse gas concentrations,” the report states.

“Energy subsidies are both large and widespread. They are pervasive across advanced and developing countries,” Clements and Gaspar write. The worst offenders are China, which gave a $2.3 trillion subsidy to its domestic fossil fuel industry, and the U.S., which spent $699 billion.

Following those countries are Russia ($335 billion), India ($277 billion), and Japan ($157 billion).

“In China alone, the World Health Organization estimates there are over one million premature deaths per year due to outdoor air pollution, caused by the burning of polluting fuels, particularly coal, and other sources,” Clements and Gaspar continued.

“Whether the total is $1 trillion or $6 trillion is not really the point. The point is that our tax dollars need to immediately stop aiding the industry that is most responsible for driving climate change.”
—Steve Kretzmann, Oil Change International
Lord Nicholas Stern, an eminent climate economist at the London School of Economics, told the Guardian on Monday, “This very important analysis shatters the myth that fossil fuels are cheap by showing just how huge their real costs are. There is no justification for these enormous subsidies for fossil fuels, which distort markets and damages economies, particularly in poorer countries.”

If anything, the report’s findings are “conservative,” Steve Kretzmann, executive director of Oil Change International, told Common Dreams. “[I]t doesn’t include direct subsidies to fossil fuel producers, and it doesn’t include things like the cost of military resources to defend Persian Gulf oil.”

“But whether the total is $1 trillion or $6 trillion is not really the point,” Kretzmann continued. “The point is that our tax dollars need to immediately stop aiding the industry that is most responsible for driving climate change. There are more than enough studies out now that prove this is an industry that relies on substantial amounts of corporate welfare.  We don’t need more studies—what we need is the political courage to end all fossil fuel subsidies once and for all.”

Coal gets the highest subsidies, the report states, “given its high environmental damage and because (unlike for road fuels) no country imposes meaningful excises on its consumption.”

The report follows a Guardian investigation which found that fossil fuel projects operated by Shell, ExxonMobil, and Marathon Petroleum in 2011 and 2012 each received between $78 million and $1.6 billion in taxpayer funding, “all granted by politicians who received significant campaign contributions from the fossil fuel industry.”

In light of these staggering numbers, subsidy reform would be a “game-changer,” Clements and Gaspar wrote.

According to the report, “Eliminating post-tax subsidies in 2015 could raise government revenue by $2.9 trillion (3.6 percent of global GDP), cut global CO2 emissions by more than 20 percent, and cut pre-mature air pollution deaths by more than half. After allowing for the higher energy costs faced by consumers, this action would raise global economic welfare by $1.8 trillion.”

“The icing on the cake is that the benefits from subsidy reform—for example, from reduced pollution—would overwhelmingly accrue to local populations,” said Clements and Gaspar. “Even if motivated purely by national reasons, energy subsidy reform would have favorable effects globally.”

“By acting local, and in their own best interest, policy authorities can contribute significantly to the solution of a global challenge. The path forward is thus clear: act local, solve global.”

Corporate Criminals – Chevron June 5, 2010

Posted by rogerhollander in Ecuador, Environment, Latin America.
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BP is not the worst criminal conspiracy dressed as an oil company. Royal Dutch Shell (more later) and Chevron are much worse.

The Crimes of Chevron
Slavery, Vandalism, Murder by Proxy

One of Chevron’s Amazon oil pits.
(Here’s Daryl Hannah at another.)

Chevron is partnered with the Myanmar (Burma) military junta in building a gas pipeline project. Finding workers for this huge project was no problem – the Myanmar military simply impressed the indigenous people into slave labor gangs.

The recruiting system is simple. The junta burns their villages to the ground, herds the population at gunpoint into relocation (concentration) camps, doesn’t allow them to grown their own food and tells them the only way to eat is to work. They work clearing the forest, as porters (slaves are cheaper than trucks), and sex slaves for the project engineers. It should be noted that Chevron does not directly impress the workers. The Burma junta does the “hiring,” Chevron just profits from the arrangement. Chevron nobly claim they are providing “jobs” for the people in the region. Chevron neglects to note they are non-paying jobs with benefits that include torture and rape. Some reports say the workers are being paid a token for their forced labor. Burmese citizens who protest the pipeline project are murdered by the government. (See also Burma Digest about oppression in Karen State, End Human Trafficking on Chevron’s link to forced labor, the Free Burma Rangers, and Rebecca Tarbottom on the True Cost of Chevron in Burma)

In Ecuador, Chevron’s attack on indigenous people involves the destruction of their land and the poisoning of their rivers. When shareholders met last week in Houston, Chevron used the Houston police department to forcibly exclude shareholders who disagreed with management on its conduct in Ecuador from attending the annual meeting.

Chevron is an American corporation with headquarters in California. In California slavery is punished by at least three years in prison per count. What Chevron dumps in the Amazon River violates the Clean Water Act (if it were done in the US), it violates Ecuador law too.

Chevron has revenues of $167 billion last year and is the third largest business in the United States. Their CEO made nearly $9 million last year, 85% of it from non-salary bonuses and options.

From Ecuador: Good and Evil December 22, 2008

Posted by rogerhollander in Environment.
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A Conversation with Ecuador’s New President
by Greg Palast http://www.gregpalast.com/a-quechua-christmas-carol/ (no date)

[Quito] I don’t know what the hell seized me. In the middle of an hour-long interview with the President of Ecuador, I asked him about his father.

I’m not Barbara Walters. It’s not the kind of question I ask.Correa reading his daughters letter

He hesitated. Then said, “My father was unemployed.”

He paused. Then added, “He took a little drugs to the States… This is called in Spanish a mula [mule]. He passed four years in the states- in a jail.”

He continued. “I’d never talked about my father before.”

Apparently he hadn’t. His staff stood stone silent, eyes widened.

Correa’s dad took that frightening chance in the 1960s, a time when his family, like almost all families in Ecuador, was destitute. Ecuador was the original “banana republic” – and the price of bananas had hit the floor. A million desperate Ecuadorans, probably a tenth of the entire adult population, fled to the USA anyway they could.

“My mother told us he was working in the States.”

His father, released from prison, was deported back to Ecuador. Humiliated, poor, broken, his father, I learned later, committed suicide.

At the end of our formal interview, through a doorway surrounded by paintings of the pale plutocrats who once ruled this difficult land, he took me into his own Oval Office. I asked him about an odd-looking framed note he had on the wall. It was, he said, from his daughter and her grade school class at Christmas time. He translated for me.

“We are writing to remind you that in Ecuador there are a lot of very poor children in the streets and we ask you please to help these children who are cold almost every night.”

It was kind of corny. And kind of sweet. A smart display for a politician.

Or maybe there was something else to it.

Correa is one of the first dark-skinned men to win election to this Quechua and mixed-race nation. Certainly, one of the first from the streets. He’d won a surprise victory over the richest man in Ecuador, the owner of the biggest banana plantation.

Doctor Correa, I should say, with a Ph.D in economics earned in Europe. Professor Correa as he is officially called – who, until not long ago, taught at the University of Illinois.

And Professor Doctor Correa is one tough character. He told George Bush to take the US military base and stick it where the equatorial sun don’t shine. He told the International Monetary Fund and the World Bank, which held Ecuador’s finances by the throat, to go to hell. He ripped up the “agreements” which his predecessors had signed at financial gun point. He told the Miami bond vultures that were charging Ecuador usurious interest, to eat their bonds. He said ‘We are not going to pay off this debt with the hunger of our people. ” Food first, interest later. Much later. And he meant it.

It was a stunning performance. I’d met two years ago with his predecessor, President Alfredo Palacio, a man of good heart, who told me, looking at the secret IMF agreements I showed him, “We cannot pay this level of debt. If we do, we are DEAD. And if we are dead, how can we pay?” Palacio told me that he would explain this to George Bush and Condoleezza Rice and the World Bank, then headed by Paul Wolfowitz. He was sure they would understand. They didn’t. They cut off Ecuador at the knees.

But Ecuador didn’t fall to the floor. Correa, then Economics Minister, secretly went to Hugo Chavez Venezuela’s president and obtained emergency financing. Ecuador survived.

And thrived. But Correa was not done.

Elected President, one of his first acts was to establish a fund for the Ecuadoran refugees in America – to give them loans to return to Ecuador with a little cash and lot of dignity. And there were other dragons to slay. He and Palacio kicked US oil giant Occidental Petroleum out of the country.

Correa STILL wasn’t done.

I’d returned from a very wet visit to the rainforest – by canoe to a Cofan Indian village in the Amazon where there was an epidemic of childhood cancers. The indigenous folk related this to the hundreds of open pits of oil sludge left to them by Texaco Oil, now part of Chevron, and its partners. I met the Cofan’s chief. His three year old son swam in what appeared to be contaminated water then came outCofan Leader Criollo vomiting blood and died.

Correa had gone there too, to the rainforest, though probably in something sturdier than a canoe. And President Correa announced that the company that left these filthy pits would pay to clean them up.

But it’s not just any company he was challenging. Chevron’s largest oil tanker was named after a long-serving member of its Board of Directors, the Condoleezza. Our Secretary of State.

The Cofan have sued Condi’s corporation, demanding the oil company clean up the crap it left in the jungle. The cost would be roughly $12 billion. Correa won’t comment on the suit itself, a private legal action. But if there’s a verdict in favor of Ecuador’s citizens, Correa told me, he will make sure Chevron pays up.

Is he kidding? No one has ever made an oil company pay for their slop. Even in the USA, the Exxon Valdez case drags on to its 18th year. Correa is not deterred.

He told me he would create an international tribunal to collect, if necessary. In retaliation, he could hold up payments to US companies who sue Ecuador in US courts.

This is hard core. No one – NO ONE – has made such a threat to Bush and Big Oil and lived to carry it out.

And, in an office tower looking down on Quito, the lawyers for Chevron were not amused. I met with them.

Chevron Lawyers“And it’s the only case of cancer in the world? How many cases of children with cancer do you have in the States?” Rodrigo Perez, Texaco’s top lawyer in Ecuador was chuckling over the legal difficulties the Indians would have in proving their case that Chevron-Texaco caused their kids’ deaths. “If there is somebody with cancer there, [the Cofan parents] must prove [the deaths were] caused by crude or by petroleum industry. And, second, they have to prove that it is OUR crude – which is absolutely impossible.” He laughed again. You have to see this on film to believe it.

The oil company lawyer added, “No one has ever proved scientifically the connection between cancer and crude oil.” Really? You could swim in the stuff and you’d be just fine.

The Cofan had heard this before. When Chevron’s Texaco unit came to their land the the oil men said they could rub the crude oil on their arms and it would cure their ailments. Now Condi’s men had told me that crude oil doesn’t cause cancer. But maybe they are right. I’m no expert. So I called one. Robert F Kennedy Jr., professor of Environmental Law at Pace University, told me that elements of crude oil production – benzene, toluene, and xylene, “are well-known carcinogens.” Kennedy told me he’s seen Chevron-Texaco’s ugly open pits in the Amazon and said that this toxic dumping would mean jail time in the USA.

But it wasn’t as much what the Chevron-Texaco lawyers said that shook me. It was the way they said it. Childhood cancer answered with a chuckle. The Chevron lawyer, a wealthy guy, Jaime Varela, with a blond bouffant hairdo, in the kind of yellow chinos you’d see on country club links, was beside himself with delight at the impossibility of the legal hurdles the Cofan would face. Especially this one: Chevron had pulled all its assets out of Ecuador. The Indians could win, but they wouldn’t get a dime. “What about the chairs in this office?” I asked. Couldn’t the Cofan at least get those? “No,” they laughed, the chairs were held in the name of the law firm.

Well, now they might not be laughing. Correa’s threat to use the power of his Presidency to protect the Indians, should they win, is a shocker. No one could have expected that. And Correa, no fool, knows that confronting Chevron means confronting the full power of the Bush Administration. But to this President, it’s all about justice, fairness. “You [Americans] wouldn’t do this to your own people,” he told me. Oh yes we would, I was thinking to myself, remembering Alaska’s Natives.

Correa’s not unique. He’s the latest of a new breed in Latin America. Lula, President of Brazil, Evo Morales, the first Indian ever elected President of Bolivia, Hugo Chavez of Venezuela. All “Leftists,” as the press tells us. But all have something else in common: they are dark-skinned working-class or poor kids who found themselves leaders of nations of dark-skinned people who had forever been ruled by an elite of bouffant blonds.

When I was in Venezuela, the leaders of the old order liked to refer to Chavez as, “the monkey.” Chavez told me proudly, “I am negro e indio” – Black and Indian, like most Venezuelans. Chavez, as a kid rising in the ranks of the blond-controlled armed forces, undoubtedly had to endure many jeers of “monkey.” Now, all over Latin America, the “monkeys” are in charge.

And they are unlocking the economic cages.

Maybe the mood will drift north. Far above the equator, a nation is ruled by a blond oil company executive. He never made much in oil – but every time he lost his money or his investors’ money, his daddy, another oil man, would give him another oil well. And when, as a rich young man out of Philips Andover Academy, the wayward youth tooted a little blow off the bar, daddy took care of that too. Maybe young George got his powder from some guy up from Ecuador.

I know this is an incredibly simple story. Indians in white hats with their dead kids and oil millionaires in black hats laughing at kiddy cancer and playing musical chairs with oil assets.

But maybe it’s just that simple. Maybe in this world there really is Good and Evil.

Maybe Santa will sort it out for us, tell us who’s been good and who’s been bad. Maybe Lawyer Yellow Pants will wake up on Christmas Eve staring at the ghost of Christmas Future and promise to get the oil sludge out of the Cofan’s drinking water.

Or maybe we’ll have to figure it out ourselves. When I met Chief Emergildo, I was reminded of an evening years back, when I was way the hell in the middle of nowhere in the Prince William Sound, Alaska, in the Chugach Native village of Chenega. I was investigating the damage done by Exxon’s oil. There was oil sludge all over Chenega’s beaches. It was March 1991, and I was in the home of village elder Paul Kompkoff on the island’s shore, watching CNN. We stared in silence as “smart” bombs exploded in Baghdad and Basra.

Then Paul said to me, in that slow, quiet way he had, “Well, I guess we’re all Natives now.”

Well, maybe we are. But we don’t have to be, do we?

Maybe we can take some guidance from this tiny nation at the center of the earth. I listened back through my talk with President Correa. And I can assure his daughter that she didn’t have to worry that her dad would forget about “the poor children who are cold” on the streets of Quito.

Because the Professor Doctor is still one of them.

Cutting Wages Won’t Solve Detroit Three’s Crisis December 9, 2008

Posted by rogerhollander in Economic Crisis, Labor.
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auto-workers1Automakers have blamed workers for the financial collapse of the Detroit auto industry. (Photo: motortrend.com)

by: Mark Brenner and Jane Slaughter, The Detroit News

 In the 1980s, Chevrolet proclaimed itself the “Heartbeat of America,” but today the American auto industry barely registers a pulse. As Washington considers Detroit’s plea for life support, the only place where pundits, politicians and Big Three executives seem to agree is that auto workers must make do with less or watch their jobs disappear.

    Some lawmakers have complained that unions are the source of the problem, but they fail to understand some inconvenient truths. According to the latest figures from the U.S. Commerce Department, every worker in Big Three factories could work for free and only shave 5 percent off the cost of their cars. The auto companies pay as much for hubcaps and fenders as they do in wages.

    Data from the Harbour Report – the industry’s gold standard – reveal that even including their benefits, labor costs in the Big Three’s plants account for less than 10 percent of the sticker price.

    No matter how you cut the numbers, demolishing auto workers’ living standards will not transform the industry. The Big Three have been trying for years. They have slashed at least 200,000 jobs since 2004, and last year they wrung billions of dollars in concessions from the United Auto Workers. The union instituted a second-tier wage of $14.50 an hour for new hires, lower than pay in the nonunion, foreign-owned auto companies in the South.

    The impact is all too apparent in auto communities across the Midwest. Forty thousand Detroit homeowners are in foreclosure, and the unemployment rate has hit double digits in many auto towns. That suffering will multiply if one of the Big Three collapses, or if retired auto workers are punished for decisions they had no hand in.

    Automakers’ decisions have been disastrous. While competitors developed gasoline-electric hybrids, Detroit mined the gas-guzzling truck and SUV market, making $104 billion in profits between 1994 and 2003. Wall Street and Congress weren’t calling for more research and development or curbing the company’s dividend payments and high-flying executive salaries back then.

    Pundits crow for us to “Dump Detroit,” but they don’t advertise that through a bailout or the bankruptcy courts taxpayers will shoulder the burden of the automakers’ colossal missteps.

    Washington shouldn’t back into a bailout – it should jump in feet-first. What’s needed is not a half-measure, a cash infusion in exchange for selling the corporate jets. Now is the time to take a sweeping look at the country’s needs.

    Our first steps should confront global warming and oil dependence through a comprehensive overhaul of the transportation system. Federal policy hasn’t changed since the 1950s, when gas was a nickel a gallon.

    Detroit, the Arsenal of Democracy, retooled in a matter of weeks when we needed tanks, not cars, in 1941. We could produce this century’s answer to the interstate highway system and build mass transit and high-speed trains.

    That same sense of urgency is needed for vehicles that don’t run on petroleum. If American engineers can build satellites that read your license plate from outer space, they can develop an alternative to the gasoline engine.

    Automakers need direction as much as financial support from Washington, just as Japan’s government molded Toyota into a world-class performer.

    In every other industrialized nation, government has stepped in and given their auto companies a significant edge. Most important, they all adopted national health care and pension systems decades ago.

    General Motors alone provides health coverage to a million people – workers, retirees and families. The annual price tag is about $5 billion, which, as CEO Rick Wagoner is fond of pointing out, is more than GM spends on steel.

    That burden could be lifted, to the benefit of 47 million uninsured Americans, by adopting a Medicare-style program for everyone. It would save the nation as much as $350 billion per year now spent for insurance companies to shuffle paper and deny claims.

    The fate of the Motor City captivates us because it speaks to our future. For 30 years, politicians have bowed to Wall Street, sitting by while wages for most workers stagnated. Big Three workers have maintained their living standards better than most, in no small part because they have a union. In a country where investment bankers gave themselves $30 billion in bonuses last Christmas, have we reached a point where $58,000 a year with benefits is too much to ask?

    We once promised the pursuit of happiness to all, including the workers who make our factories run, not just those who trade credit default swaps. Now more than ever, we need to recapture that spirit with a thoroughgoing plan to rescue the environment, care for the sick and transform transportation.

    Mark Brenner and Jane Slaughter work for Labor Notes, an independent monthly labor magazine in Detroit. It receives no support from the United Auto Workers.