Celebrating the New Year with a victory against corn ethanol
Posted Jan. 6, 2012 / Posted by: Michal Rosenoer
With the beginning of the New Year came the expiration of the biggest subsidy for corn ethanol, the Volumetric Ethanol Excise Tax Credit. Friends of the Earth campaigned against the tax subsidy, nicknamed VEETC, a $6 billion-a-year handout to the oil and corn ethanol industries, for over three years. We won a huge victory for the environment and taxpayers when Congress adjourned without renewing the tax subsidy in late December. VEETC had existed in different forms for over thirty years, during which it wreaked havoc on our natural resources, raised food prices, increased world hunger, and diverted federal funding from truly renewable energy technologies like wind, solar, and electric vehicles. Good riddance to a terrible policy that supported corporate polluters at the expense of environmental and social sustainability. We all deserve a celebratory drink for that; in 2012, let’s resolve to have ethanol stay in our shot glasses, not in our gas tanks.
Taking on Big Oil and Corporate Agribusiness is no small task; for years, Friends of the Earth worked with a diverse coalition of organizational partners ranging from MoveOn.org to the Heartland Institute, a bipartisan group of Congressional champions, and our members to make sure this tax subsidy disappeared. So, it’s no surprise that the news of this huge victory was reported in hundreds of news outlets throughout the country. Everyone from the New York Times to Biofuels Digest reported on the story, with varying perspectives.
Robert Pear at the New York Times definitely got it right when he reported that “the demise of the subsidy is all the more remarkable because it comes at the peak of the political season in Iowa, where corn is king.” In fact, almost all the GOP presidential candidates have actually come out against corn ethanol subsidies recently, which only goes to show how hard Friends of the Earth and our coalition partners hit the corporate polluters by ending VEETC. The industry is definitely still a force to be reckoned with, but they’re shaking in their boots (and rightfully so.)
Our colleague at the Natural Resources Defense Council, Sasha Lyutse, covered just how much we knocked down the corn ethanol industry in her recent blog post. Sasha took “a page out of Jon Stewart’s book and [contrasted] industry statements from 2010—when corn ethanol lobbyists were issuing dire warnings that equated ending the VEETC with “pushing the industry off a cliff”—with statements over the last few months, as corn ethanol proponents pulled a sharp 180 and started telling anyone who’d listen just how much they didn’t need or want the VEETC.” As Earth Track also noted, six months ago the ethanol industry was talking about how the tax subsidy would kill their industry, cost Americans hundreds of jobs, and hurt America’s energy independence. But just last week when VEETC expired, Bob Dineen, CEO of the Renewable Fuels Association, wrote that the corn ethanol industry chose to let VEETC expire, essentially to make the world a better place. That’s a first! Dineen stated that “by helping to reduce the federal budget deficit…the US ethanol industry is doing its part to address America’s challenges. Meanwhile, the well-established and highly profitable oil industry is still receiving huge subsidies and refusing to give up any.” Wow – you know you’ve really won a fight when the loser claims the victory as their own.
Other articles attributed the win against VEETC not to the environmental community or the diverse coalition working against the subsidy, but rather to sources like the Tea Party (like this one in The Atlantic), high oil prices, and even just plain ole’ good luck (like this one in The Economist). Those authors may not have been aware of the huge amount of public and Congressional education we did, but we’re glad they covered the topic either way. Nevertheless, the vast majority of articles noted that environmental groups like Friends of the Earth played a huge role in the end of the tax subsidy, including great ones by the San Francisco Chronicle and FiredogLake.
Our work, however, is far from over as far as bad biofuels policies go. As MSNBC noted, we still need to tackle additional tax credits that could be manipulated to fund environmentally harmful biofuels, like the cellulosic tax credit. Likewise, there are going to be new Congressional tax fights throughout 2012 during which Friends of the Earth will have to be vigilant to make sure VEETC and other tax subsidies for corn ethanol don’t reappear. And on top of it all, we are going to increase our advocacy on the Renewable Fuel Standard, which mandates the use of 36 billion gallons of biofuels by 2022. The EPA just released data showing that in 2012, the Renewable Fuel Standard will require 12 billion gallons of dirty corn ethanol production at minimum; Friends of the Earth is starting the New Year off right by already beginning to address these policies and plan ways to reform them so they only support truly sustainable biofuels.
Other notable articles on the expiration of VEETC include ones by the Washington Post, the Wall Street Journal, and Biofuels Digest.
Keep an eye out for my next blog post, in which I’ll tell the in-depth story about Friends of the Earth’s perspective on how we won this battle against the tax subsidy, and what lessons we can take forward for even more wins against corporate polluters in the future.
Climate and Energy,
Economics for the Earth
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