Fair Price Energy?
When I first saw the Fair Price Energy site, my first thought was fair trade coffee. I like fair trade coffee: I think it’s great that people who have strong concerns about social justice are also willing to put their money where their mouth is and pay more for coffee. And the best part about fair trade coffee is that it’s not mandatory. Actually, I don’t even drink coffee. So fair trade coffee is great, because I don’t pay anything for it.
Fair Price Energy is a simple plan: when purchasing fuel or an energy source, collect two fees from the consumer: a security fee which is proportional to how much the energy source compromises national security, and a carbon fee which correlates to environmental extraction costs and how much greenhouse gases are released burning the fuel.
Here’s the fun part. Come tax day, every US taxpayer gets a “fee return”, which takes all of the money collected and distributes it equally among all taxpayers. It’s almost, but not quite, entirely unlike social security, which pays you more the more you put into the system. In the case of FPE, you get more money the more you don’t participate.
Sounds great on first listen. I would be in favor of this plan, if only for the selfish reason that our household uses considerably less electricity and energy than the average household. In fact, half of the country should be in favor of this plan for purely selfish reasons.
Alas, this plan has problems. Allow me to enumerate them:
- First, this plan is administered by the government. Even if the folks currently in charge implemented and administered the plan fairly (whether on a federal or state level), there’s no guarantee that the next bunch of scoundrels wouldn’t bend or twist the project to their own ends. Once you give the money to the government, it’s gone: midway through the year if they say they’re going to divert those funds to The Evil Pentagon or give out huge grants to Planned Parenthood or use the “surplus” for tax cuts for the rich (or whatever cause or government program you hate the most) there’s nothing you can really do about it.
- What about government entities? Do local governments have to pay the fees? School districts? Public transportation facilities? None of those groups file tax returns.
- Who assesses the fees? Environmentalist hippies who want to increase the carbon fee, or evil earth-trashing neocons who want to increase the national security fees against countries they don’t like?
- Who collects the fees? Energy companies? Individual gas stations? Seems like a nightmare of administration.
- Different parts of the country receive oil and energy from different sources, which would have different national security fees. Living in Minnesota, most of our oil comes from Canada. Woohoo! No national security fee for me unless those Canucks get their backbacon in a twist. (And why couldn’t I buy a tanker truck full of Canadian oil and truck it over to California?)
- Seems regressive. Poor people may be using more energy than average just because they can’t afford to make improvements in the energy efficiency of their homes and cars, etc.
- Doesn’t take into account how the energy will be used. A gallon of gas can be used in a Prius, or it could be used in a 1972 Mercury Cougar. Those two cars are going to put very different amounts of crud into the air.
- Here’s a point from my wife Peggy: When it comes to oil, coal, or natural gas, we’re eventually going to burn all known and yet to be discovered economically feasible reserves anyway, so who cares? [I think there is still a place for emissions standards, but that’s a separate subject — ed.] [Yeah, ok, kind of — P.]
- Another point from Peggy: Nuclear needs a waste disposal fee; wind power plants should get a bird-killing fee.
- Only taxpayers filing income tax returns get refunds, but everyone has to pay. Not so good for teenagers on allowances, who have to pay gas fees yet don’t get anything back, and it certainly has a deterrent effect on illegal immigrants. (I suppose this is or isn’t a negative point depending on your personal political beliefs.) On the other hand, your Uncle Harold who lives in the spare room down the hall and freeloads off your parents has it great: he doesn’t pay heating costs, and only uses his terribly inefficient Ford Econoline van to drive the 10 miles to and from his minimum wage job. This plan could easily double his income!
- From the website: “Corporations would not receive a fee return, but would be able to use the market to recoup their increased costs.” That sentence means “Corporations will move their energy intensive manufacturing operations overseas and ship the products back to the United States.”
- Recycling is heavily subsidized so that people who are in favor of recycling can feel good about themselves. This plan would increase the costs of recycling even more.
- If you’re really in favor of this plan, even after taking all of the above problems into consideration, there’s nothing stopping you from forming your own energy cooperative and imposing the fees on your cooperative members, and distributing the fees back to the members on an equal basis. If you try this out, let me know how it works for you.
The bottom line is very simple: Energy prices are what they are, and people should take them into account when making their decisions. But whether they are high or low it doesn’t mean that something is broken and needs fixing. People who try to think up schemes to get other people to use less energy forget the fact that there is already a “scheme” in place: the price of energy itself.