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END FOSSIL FUEL SUBSIDIES

Time for the US to End Fossil Fuel Subsidies

June 03, 2018

Han Chen Danielle Droitsch - Alum

A new study, the G7 Fossil Fuel Subsidy Scorecard, measured the US against other G7 countries on each country’s progress in eliminating fossil fuel subsidies. The US ranked the worst out of the G7 countries, spending over $26 billion a year propping up fossil fuels. (The G7 countries are Canada, France, Germany, Italy, Japan, UK and the US.)

How did the US manage to score so low? By continuing to subsidize fossil fuel production, and then promoting even more pro-polluter, pro-fossil initiatives since President Trump took office.

In 2009, the G7 countries pledged to eliminate fossil fuel subsidies. In 2016, the G7 set a deadline of 2025 for doing so. The G7 Fossil Fuel Subsidy Scorecard, produced by NRDC with the Global Subsidies Initiative, Oil Change International and Overseas Development Institute, tracks progress towards that goal. The indicators to determine progress included assessments of countries’ level of transparency of reporting on subsidies, recent pledges and commitments related to fossil fuels subsidies, and any actual progress ending specific subsidies for fossil fuel exploration, coal mining, oil and gas production, fossil-fuel based power, and fossil fuel use.

While the US ranked higher in some categories such as “transparency” and “ending support for fossil fuel consumption”, it ranked extremely poorly on “pledges and commitments to end subsidies” and on “ending support for coal mining, oil and gas production, and fossil fuel exploration.”

For those who have paid attention to the onslaught of pro-fossil policies from the Trump Administration, the fact that the US ranks last will come as no surprise. (You can find a summary chart of how the US ranks against other countries here). And it’s important to remember that these fossil fuel subsidies come at the expense of public health, local communities, and the climate. Here are some examples of the areas where the US government has continued to prop up fossil fuel companies and how we’ve been fighting back.

Backtracking on fossil fuel pledges and commitments

Following the 2009 pledge by G7 countries to eliminate fossil fuel subsidies, progress has been made, but far too slowly. While other nations have made progress, for example with the UK, Canada, France, and Italy forming part of a global Powering Past Coal Alliance, the US is backtracking on our commitments. Rather than trying to eliminate fossil fuel subsidies and financing, the Trump Administration is promoting more subsidies for fossil fuels at home and abroad.

On the international stage, the Administration rolled back the Guidance to the US Treasury. This Guidance determines whether the US votes to support fossil fuel projects at multilateral institutions such as the World Bank and African Development Bank. The new US policy is to push these multilateral financial institutions to finance more fossil fuel production and consumption in developing countries, a move that’s not only harmful to local communities and health but to global climate goals. The US received a low score on the “Pledges and Commitments” indicator because of these rollbacks of prior policies and for the promotion of new fossil fuel financing. While other countries are moving forward through initiatives such as the Powering Past Coal Alliance, the US has not taken such measures.

Subsidizing domestic coal mining

The US scored the worst out of the G7 countries when it comes to ending support for coal mining. There has been some significant progress in ending government support for coal mining by Canada, France, and Italy, which may be due to the EU Member States’ commitment to phase out subsidies to hard coal mining by 2018. Meanwhile, the US still retains loopholes in how royalty payments are calculated for mining on public lands. Even worse, the Trump Administration has cancelled plans to review and modernize the federal coal leasing program.

The outdated process for determining fair market value for coal has cost taxpayers more than $30 billion over the last 30 years. In one example, companies were paying fees for a sale valued at only $1 when the open market price was anywhere from $10 to over $100 per ton of coal.

And it’s not only for coal. The Interior Department is “short-changing taxpayers and enriching fossil fuel executives” by allowing companies to avoid paying proper royalty rates for oil and gas too. That’s why NRDC filed to intervene in a lawsuit against the Trump Administration to prevent companies from underpaying fees for extracting fossil fuels from publicly-owned lands.

Subsidizing fossil fuel production

The largest amount of US subsidies are for oil and gas production. The total for 2015/2016 was an average of $15 billion a year in fiscal support for oil and gas production. The only country to rank worse was Canada. While the tax bill passed in 2017 repealed two subsidies with current near-zero value to industry, the same bill included new tax provisions that benefit holders of Master Limited Partnerships. Most Master Limited Partnerships are oil and gas interests. Internationally, the promotion of a US-led fossil fuel alliance has drawn sharp criticism.

Research has shown that nearly half of discovered US oil that is not yet developed is dependent on subsidies. For example, in the Williston Basin of North Dakota, 59% of oil resources are subsidy dependent. In the Permian Basin of Texas, 40% of oil resources are subsidy dependent. Even so, the Trump Administration has opened up large swaths of land and our oceans to new drilling, despite the fact that many projects are heavily subsidy-dependent and unnecessary.

Subsidies by Country

G7 fiscal support to fossil fuels (annual average 2015-16, USD billion)

Note: Direct comparison of the value of fiscal support between countries can be challenging. As the OECD emphasized in its 2015 Companion to the Inventory of Support Measures for Fossil Fuels, a significant number of subsidies take the form of tax expenditures that are calculated using a country’s benchmark tax regime. Because this can vary widely by country, tax expenditure estimates are not readily comparable across countries (OECD, 2015).

Subsidizing fossil fuel-based power generation

In 2017, the Department of Energy under Secretary Rick Perry attempted to funnel billions of dollars from utility customers to the owners of old and expensive coal plants. He requested that the Federal Energy Regulatory Commission issue an order propping up the failing plants to support the “resilience” of the energy system, despite having no evidence that they were needed, and without even defining “resilience.” Fortunately, the Republican-led Federal Energy Regulatory Commission unanimously rejected the proposal.

Having failed to secure a bailout from the Federal Energy Regulatory Commission, one of the coal plant owners is now lobbying for an emergency order from the Department of Energy to force customers to pay subsidies to coal plants located within the nation’s largest regional grid, PJM Interconnection, to keep them running, despite the grid operator’s analysis that the plants are not needed for reliability purposes. Similar to the argument happening in the UK and elsewhere about “capacity mechanisms,” the argument is that paying these fossil fuel power generators ensures “resilience” based on the supposed security they provide to the grid relative to variable renewables resources, even though such claims are not well-grounded in facts.

Internationally, the US government has also used public funds to support fossil fuel-based power generation. The US Export-Import Bank has supported numerous gas-fired power plant projects in Ghana, Nigeria, Senegal and Spain.

Time for Reform

The first step to eliminate subsidies is to do a full accounting of those that exist. Fortunately, the US ranks relatively well on the transparency of reporting on fossil fuel subsidies, because the US and China completed a subsidy “peer review” process under the auspices of the G20. While the official US report contained gaps compared to the data on subsidies we’ve collected in this report, at least the US review included a list of substantial subsidies in need of reform.

The next step is to actually implement the reforms needed to eliminate subsidies. Much of this will require action through Congress, as many of the subsidies are embedded in the tax code. Rather than spending billions subsidizing fossil fuel companies, it’s time for lawmakers to take proactive steps in the near-term to phase out government support for fossil fuel production at home, with a strong emphasis on ensuring a just transition for workers involved in these industries.

Subsidies Scorecard

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honestly tho that scene in the incredibles where mr. incredible sees the names of all the old super heroes that used to be his friends / that he knew from Back in the Day and how every one of them has been killed by syndrome is such a chilling scene for so many reasons 

like for one, everyone he knew is dead at this point and has been killed on the same island he’s at now and two, its heartbreaking bc that means that almost every hero wanted to try out being a hero again despite the laws against it and wanted to try and help someone out and relive their glory days, only to be straight up murdered like fuck that scene is just so fuckin intense

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Prostitution information NEG

The idea that legalizing or decriminalizing commercial sex would reduce its harms is a persistent myth. Many claim if the sex trade were legal, regulated, and treated like any other profession, it would be safer. But research suggests otherwise. Countries that have legalized or decriminalized commercial sex often experience a surge in human trafficking, pimping, and other related crimes

Prostitution, regardless of whether it’s legal or not, involves so much harm and trauma it cannot be seen as a conventional business.

Interviews with prostituted individuals in New Zealand reveal that a majority of prostituted people in the country did not feel as if decriminalization had curbed the violence they experience, demonstrating that prostitution is inherently violent and abusive. (Report of the Prostitution Law Review Committee: pp. 14)

One study of prostituted women in San Francisco massage parlors found that 62% had been beaten by customers. (HIV Risk among Asian Women Working at Massage Parlors in San Francisco: pp. 248)

An investigation of the commercial sex industry in eight American cities found that 36% of prostituted people reported that their buyers were abusive or violent. (Estimating the Size and Structure of the Underground Commercial Sex Economy in Eight Major US Cities: pp. 242)

The “workplace” homicide rate among prostituted women in Colorado is seven times higher than what it was in the most dangerous occupation for men in the 1980s (taxi driver). (Mortality in a Long-term Open Cohort of Prostitute Women: pp. 783)

Prostitution and human trafficking are forms of gender-based violence.

Most persons in prostitution are either female or transgender women. (Estimating the Size and Structure of the Underground Commercial Sex Economy in Eight Major US Cities: pp. 219 and The Impact of the Prostitution Reform Act on the Health and Safety practices of Sex Workers: pp. 61)

In contrast, the vast majority of sex buyers are male. (Executive Summary of the Preliminary Findings for Team Grant Project 4 – Sex, Safety and Security: A Study of Experiences of People Who Pay for Sex in Canada: pp. 3)

Prostituted persons are mostly women and face exceptional risks of murder (pp. 784) and violence at the hands of male sex buyers (pp. 248), signifying that the practice is on the continuum of gender-based violence. This remains true even in areas where prostitution is legal or decriminalized. (pp. 14)

Legalizing or decriminalizing prostitution has not decreased the prevalence of illegal prostitution.

An investigation commissioned by the European Parliament found that in countries with legal prostitution, such as Austria, “the effect of regulation can be a massive increase in migrant prostitution and an indirect support to the spreading of the illegal market in the sex industry.” (National Legislation on Prostitution and the Trafficking in Women and Children: pp. 132)

Denmark decriminalized prostitution in 1999, and the government’s own estimates show that the prevalence increased substantially over the decade that followed. (Prostitutionens omfang og former 2012/2013: pp. 7)

Interviews with prostituted persons in the Netherlands reported that “legalization entices foreign women to come to the Netherlands, causing an increase [in prostitution].” (Prostitution in the Netherlands since the lifting on the brothel ban: pp. 38)

Legalization or decriminalization has not reduced the stigma faced by prostituted people.

After New Zealand decriminalized prostitution in 2003, there were still reports among prostituted persons of “continuing stigma” and “harassment by the general public.” In addition, there was little difference in disclosure of occupation to healthcare professionals before and after decriminalization. (The Impact of the Prostitution Reform Act on the Health and Safety practices of Sex Workers: pp. 11 and 12)

Legalization or decriminalization increases human trafficking.

One study with data from 150 countries found that those with “legalized prostitution experience a larger reported incidence of trafficking inflows.” (Does Legalized Prostitution Increase Human Trafficking?: pp. 76)

Another quantitative analysis similarly reported that sex trafficking is “most prevalent in countries where prostitution is legalized.” (The Law and Economics of International Sex Slavery: Prostitution Laws and Trafficking for Sexual Exploitation: pp. 87)

Regulated prostitution increases the size of the overall market for commercial sex, which benefits criminal enterprises that profit from sex trafficking. (Does Legalized Prostitution Increase Human Trafficking?: pp. 67 and National Legislation on Prostitution and the Trafficking in Women and Children: pp. 132)

Attempts to regulate prostitution have failed and adherence is low.

A large-scale evaluation of the legalization of prostitution in the Netherlands, coordinated by the Ministry of Justice, found that licensed brothels did not welcome frequent regulatory inspections. This undermines theeeir willingness “to adhere to the rules and complicates the combat against trafficking in human beings.” (Prostitution in the Netherlands since the lifting on the brothel ban: pp. 11)

A review of the empirical evidence on the Dutch legalization of prostitution found that many prostituted persons still rely on anonymity, secrecy, and cash transfers, demonstrating that a legalized prostitution market operates much like a criminal market. (Legale sector, informele praktijken. De informele economie van de legale raamprostitutie in Nederland: pp. 115-130)

New Zealand’s Prostitution Law Review Committee found that a majority of prostituted persons felt that the decriminalization act “could do little about violence that occurred.” (pp: 14) The Committee further reported that abusive brothels did not improve conditions for prostituted individuals; the brothels that “had unfair management practices continued with them” even after the decriminalization. (pp: 17)

The German government’s own evaluation of the 2001 law that legalized prostitution suggested that fewer than 8% of prostituted individuals are “officially insured as a prostitute.” (Report by the Federal Government on the Impact of the Act Regulating the Legal Situation of Prostitutes (Prostitution Act): pp. 26)

Legalization and decriminalization promotes organized crime.

Evaluations have found that regulation of prostitution creates a façade of legitimacy that hides sexual exploitation, and that brothels can “function as legalized outlets for victims of sex trafficking.” (The challenges of fighting sex trafficking in the legalized prostitution market of the Netherlands: pp. 227)

An example of how sex trafficking can operate behind a veil of legalized prostitution is the so-called “Sneep case.” German pimps traveled across the border to the Netherlands and took over large parts of the Red Light District in Amsterdam, using intimate relationships and brutal violence to coerce women to sell sex and hand over their profits. (Relationships Between Suspects and Victims of Sex Trafficking. Exploitation of Prostitutes and Domestic Violence Parallels in Dutch Trafficking Cases: pp. 49-64, and The challenges of fighting sex trafficking in the legalized prostitution market of the Netherlands: pp. 218)

The Nordic Model (criminalizing the act of buying sex, but legalizing the act of selling sex) has lowered the prevalence of street prostitution.

flag-of-norway

L.C. Nøttaasen

An evaluation of the impact in Sweden found that street prostitution had been cut in half. (Förbud mot köp av sexuell tjänst: En utvärdering 1999–2008: pp. 34-35)

Similarly, an evaluation of Norway’s implementation of the Model in 2009 found that it “has reduced demand for sex and thus contribute to reduce the extent of prostitution” (pp. 11), a result that has been confirmed in additional analyses. (Kriminalisering av sexkjøp: pp. 13)

The Nordic Model has prevented an increase in prostitution overall.

While Sweden’s neighbors, such as Denmark and Finland, experienced increases in prostitution, data suggest that it remained flat in Sweden for the decade that followed the implementation of the Nordic Model. (Förbud mot köp av sexuell tjänst: En utvärdering 1999–2008: pp. 36)

Prostituted individuals often come from vulnerable populations and lack other options, while most sex buyers do not.

Individuals who are prostituted are often poorly educated (pp. 248) and they are forced into prostitution by the lack of opportunities. (Estimating the Size and Structure of the Underground Commercial Sex Economy in Eight Major US Cities: pp. 220)

An evaluation of New Zealand’s decriminalization revealed that 73% of prostituted individuals needed money to pay for household expenses, and about half of those who were street-based or transgender had no other sources of income. (The Impact of the Prostitution Reform Act on the Health and Safety practices of Sex Workers: pp. 9)

In sharp contrast, sex buyers are more likely to be employed full-time, more likely to have graduated from college, and have higher-than-average incomes. (Ordinary or Peculiar Men? Comparing the Customers of Prostitutes With a Nationally Representative Sample of Men: pp. 812 and Executive Summary of the Preliminary Findings for Team Grant Project 4 – Sex, Safety and Security: A Study of Experiences of People Who Pay for Sex in Canada: pp. 2)

NO BUYERS. NO BUSINESS.

Sex trafficking in the U.S. is a business where “supply” is mostly vulnerable women and girls, and the “demand” is men who buy sex illegally. Demand Abolition advocates for arresting and prosecuting sex buyers—instead of the victims—to dramatically and sustainably prevent sexual exploitation.

The Problem: Commercial Sexual Exploitation

It’s happening here. It’s happening now.

Sex trafficking is a glaring problem in the United States, traumatizing thousands of women and children trapped in prostitution. In 2017, the National Human Trafficking Hotline received over 3,000 reports of sex trafficking from all over the country.

Prostitution is not a victimless crime.

Prostitution, or commercial sexual exploitation, capitalizes on vulnerable women and children. Research shows that most prostituted people want to stop selling sex, but find it difficult to leave due to entrapment, trauma, social stigma, or the sense that there’s no other option.

The men who buy prostituted people, also known as “johns,” play a key role in perpetuating this notorious cycle. In addition to the harm often inflicted on the prostituted person, engaging in paid sex also harms the purchaser, his family, and the community. In our recent national survey, 64% of sex buyers in the United States said they want to stop.

The Solution: End Sex Buying

Men who buy sex create the “demand” that fuels the illegal sex trade. Without buyers, prostitution (and by extension sex trafficking) would cease to exist.

Our nationally-representative survey suggests that 6% of US men have bought sex in the past year. While the majority of men will never purchase a human being for sex, high-frequency buyers (who buy at least once a month) are responsible for three of every four transactions in the illegal sex trade. Learn more about sex buyers

Arresting prostituted persons, whom are often forced or coerced, has not and will never solve the problem; law enforcement and policies must target the buyers who drive this illegal and exploitative market. We must work with law enforcement to avoid penalizing and traumatizing those being exploited, deter men from buying, reduce rates of re-offending, and reserve significant penalties for dangerous and repeat offenders.

Our Approach

Demand Abolition is committed to eradicating the illegal commercial sex industry in the US by combating demand for purchased sex and increasing accountability for buyers. We embrace a multisector approach, working closely with an active network of survivor leaders, criminal justice professionals, practitioners, researchers, policymakers, corporate leaders, philanthropists, media, and others.