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Ron Johnson’s gas-price nonsense obscures the real costs

Massive fossil fuel subsidies power climate change and Johnson’s lies in the first debate of Wisconsin’s Senate race.
Illustration: Ghosts and ghouls are shown swarming about the Wisconsin Capitol. Illustration by Maggie Denman.
Illustration: Ghosts and ghouls are shown swarming about the Wisconsin Capitol. Illustration by Maggie Denman.

Massive fossil fuel subsidies power climate change and Johnson’s lies in the first debate of Wisconsin’s Senate race.

Each week in Wisconsin politics brings an abundance of bad policies, bad takes, and bad actors. In our recurring feature, Capitol Punishments, we bring you the week’s highlights (or low-lights) from the state Legislature and beyond.

During Friday night’s debate between Sen. Ron Johnson and Lt. Gov. Mandela Barnes, Johnson blamed “Democrats’ war on fossil fuels” for high gas prices. And when asked about transitioning our economy from fossil fuels to clean energy, Johnson said, “We simply can’t afford spending hundreds of billions of dollars trying to solve a problem that’s not solvable.”

Which is funny, because the latter quote is a perfect summary of the United States’ (and other countries’) ongoing subsidies to prop up the fossil fuel industry, an increasingly unstable industry centered on a finite resource that is expensive to extract.

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The Trump administration’s 2020 CARES Act—which Johnson voted for after grousing about giving Americans $1,200—gave fossil fuel companies $8.2 billion in tax subsidies with no strings attached. In fact, those same companies took the pandemic aid and laid off 58,000 workers.

The fact that we gave this industry billions in tax dollars and didn’t even require them to retain their workforce is infuriating enough. Now they have turned around and raised gas prices while their Republican benefactors blame the paltry support ordinary people received for inflation. 

And there’s no relief in sight. Just last week, OPEC Plus (the 13 Organization of Petroleum Exporting Countries plus 11 non-members) voted to cut output by 2 million barrels when prices are already high and winter is coming, contributing to greater demand for gas for heating. 

In 2020, the fossil fuels industry worldwide received $5.9 trillion in subsidies according to the International Monetary Fund, with five countries—the US, China, Russia, India, and Japan—accounting for two-thirds of those funds. Only about 8% of that is direct funding; the remaining 92% is made up of tax breaks or the estimated costs of externalities, such as the health and environmental damage caused by fossil fuels.

Those subsidies also feed into the myth that fossil fuels are less expensive than renewable technology, by hiding their true cost. I’ve written about the endless money pit of single-vehicle infrastructure; subsidizing fossil fuels to keep their prices low enables our ongoing dependence on cars and has wide-ranging ripple effects.

“Underpricing leads to overconsumption of fossil fuels, which accelerates global warming and exacerbates domestic environmental problems including losses to human life from local air pollution and excessive road congestion and accidents,” the IMF report reads. 

The cold, hard truth is that renewable energy and cleaner industries are not only better for health and safety, and spur job growth in new, sustainable industries, they are also cheaper. The problem is that the oil and gas industry has deep pockets, an army of lobbyists, and deep relationships with politicians pushing against climate action and green technology. They have been lying about climate change for decades and there are no signs they plan to stop.

In many ways, Wisconsin’s Senate race is a race between a mythic past and a future grounded in reality. It’s a choice between building industries and communities that are safer, cleaner, and will last generations, or continuing to throw money into short-sighted, bottomless pits.

This post has been modified to clarify the fossil fuel subsidies from the IMF’s report.

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