It seems the height of irony that the original size of the Wall Street bail out, $700 billion (ballooned to a mere $840 billion before it passed Congress) is about the same dollar amount as what we spend on oil in the United States in a year - 20 million barrels a day/365 days a year, roughly $100 a barrel. Hat tip to A. Siegel of Get Energy Smart Now! for pointing that out to me.
John Pendlebury wrote a recent article comparing tar sands oil extraction to the sub-prime lending disaster. The reality is that our whole treatment of the climate crisis is the equivalent of taking out a sub-prime loan. And it is, indeed, a disaster. Buy too much house with money you don't have. Continue to use too many fossil fuels with a climate that can't recover. Pay the bare minimum now and pretend like the day isn't coming when those ballooning fees are due; or when our fossil fuel dependency and what we have done to the planet doesn't destroy us. And the fossil fuel energy companies are the mortgage brokers looking for a commission and not caring whether the loan is good or not. They don't get paid on the repayment, they get paid on the sale. They don't get paid on the repercussions of burning fossil fuels, they get paid on the burning. So they sell and they sell and they sell and we keep buying thinking that somehow, magically, we won't really have to pay when the real costs kick in, or deal with a planet gone terribly wrong.
Al Gore shared similar sentiments at the Clinton Global Initiative meeting 2 weeks ago:
"Now, in the midst of this frenetic effort to find a bailout, many are saying we should have prevented this. We should have realized that the short-term greed was overcoming a clear vision of what the risk was," said Gore.
"Well, now is the time to prevent a much worse catastrophe because the world has several trillion dollars in sub-prime carbon assets, based on the assumption that it is perfectly alright to put 70 million tons of global warming pollution into the atmosphere every 24 hours. Since we met here last year, the world has lost ground to the climate crisis. This is a rout," he warned. "We are losing badly." - Environment News Service
But it turns out that magical thinking isn't always off, as the Wall Street executives that bonused themselves a mere $33 billion last year for doing such a stellar job (add that to other compensation, and it's over $122 billion), aren't having to pay for their excesses, their faulty thinking or their greed. Turns out they can buy too much house and keep it, too, without paying any price at all. Sure, some may lose their jobs, but they already got their money. So why shouldn't we be able to do the same with our fossil fuels, our convenience obsessed disposable culture, our accumulation of stuff?
As DeSmog Blog asks, will government step in and save us from ourselves as they have saved Wall Street? Clearly, left in the hands of Henry Paulson, the opportunities to make this a green recovery are gone, despite the House Select Committee on Energy Independence and Global Warming holding hearings on just this subject as the financial detritus was hitting the fan. The title of the hearing was "The Green Road to Economic Recovery" and they focused on the Green Recovery report released last week by the Political Economy Research Institute and the Center for American Progress. Shortly after, another green jobs study by the Worldwatch Institute at the United Nations was released to...crickets, although all indicators show that investing in green jobs would be far more lucrative and energizing of the economy at all levels than putting money into the same institutions that have just failed us so badly. In fact, investing in green jobs would have been just that, a tax payer investment that promised great returns. Instead, the tax payers are buying junk bonds with nobody left to pawn them off on.
Much is made of the "pork" in the bill. The tax breaks for wooden arrows. The tax breaks for NASCAR. Greenpeace does a great job breaking down the ridiculous, polluting bonuses to coal and oil. For example:
The bailout expands a tax credit to refinery property that is used to directly convert oil shale and tar sands into liquid transportation fuels. The extraction, refining and combustion of oil from shale is likely to generate more than 50 percent more greenhouse gasses than conventional fuels and would be mined from some of our most precious wildlands in the Rocky Mountain West. - Greenpeace
The totality of the pro-environmental aspects of the bill were the one year extension of tax credits for wind energy, an eight-year extension for investment tax credits for solar energy projects and tax credits ranging from $2,500 to $7,500 for purchasers of plug-in-hybrids.
The bill also provides incentives for the use of biodiesel. However, critics of this subsidy say it promotes a "splash and dash" loophole where companies mix foreign biofuels with U.S. biodiesel to receive the U.S. subsidy, but then sell the fuel at a discount to European markets. - Reuters
Also meeting with crickets was the news reported by CSR wire that Lehman closed its carbon trading desk two weeks ago, threatening the viability of the ten Kyoto Clean Development Mechanism (CDM) deals it had brokered. Merrill's carbon trading desk has remained open for now, but whether the carbon index Merrill launched earlier this year will continue to be viable remains unclear. Carbon trading is hardly the answer to our environmental ills, but a carbon market is imminent and it's not looking like our financial institutions are up to the task of monitoring it.
And on top of the $840 billion is $25 billion in low interest loans to the American auto manufacturers, which they were whining were not only not nearly enough, but shouldn't be tied to making more fuel efficient cars. But had we done a better job of fuel economy regulation, Detroit wouldn't be in the position they are in. They would have been "forced" through regulation to make a good business decision by making more fuel efficient cars.
What happens now in terms of world financial markets is anyone's guess. The precipitous decline of the stock market on Friday in response to the shedding of more than 150,000 more jobs from the American economy despite the passage of the so-called financial rescue package does not bode well. And yet, there is a way out of recession through investing in the green jobs economy. If only the government would save the rest of us from ourselves.
Further Reading:
