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green economy
'The People Always Pay': Report Details How LNG Tax Breaks Harm Gulf Communities
"These deals essentially pay industry to inflict more suffering on already climate-ravaged communities," said one local opponent of efforts to further expand gas exports in the region.
Dec 02, 2024
How do local communities lose out when governments invest in fossil fuel facilities instead of community needs?
That's the question at the heart of a new Sierra Club report released Monday, titled "The People Always Pay: Tax Breaks Force Gulf Communities to Subsidize the LNG Industry"—which details the extent to which the export market for liquefied natural gas, or LNG, benefits from billions of dollars in tax breaks in Louisiana and Texas—revenue that could be invested in public infrastructure, schools, and other priorities.
In the past decade, after an export ban was lifted by the Obama administration in 2015, the United States has shifted from an importer to a mass exporter of LNG, which a recent Cornell University study revealed has worse impacts than coal. Critics warn that investment in LNG causes environmental harm and hampers the transition to a green economy. Export terminal sites are concentrated along the Gulf Coast, primarily impacting impoverished coastal communities in Louisiana and Texas, according to the Sierra Club's report.
"The immense scale of tax breaks granted to billion-dollar LNG projects—millions of dollars per job—is mind-blowing. These deals essentially pay industry to inflict more suffering on already climate-ravaged communities by polluting the air and water while depriving Gulf Coast communities of vital revenue for schools, infrastructure, healthcare, emergency services, coastal restoration and protection," said James Hiatt, founder of For a Better Bayou and a resident of Calcasieu Parish in Louisiana, who is featured in the report.
The report relies on interviews with community members and takes a close look at the primary tax abatement programs that LNG export projects have benefited from, respectively.
Under two Louisiana tax break programs—the Industrial Tax Exemption Program (ITEP) and another called Quality Jobs—nine operating, proposed, or under-construction LNG export terminals have been provided $21.6 billion. In Cameron Parish, for example, home to Cheniere Energy's Sabine Pass LNG facility, the company is set to receive $4.9 billion in ITEP subsidies between 2012 and 2040, according to the report. In total, Cameron Parish residents are set to lose out on $14.9 billion in revenue from 2012-2040 due to ITEP subsidies for various LNG export terminals.
That investment in fossil fuel facilities translates to a lost $3.8 billion that could go towards schools and another $2.4 billion that could go towards health services, according to the authors of the report.
The report also details how bolstering the LNG market has adversely impacted the local economy.
For example, for Cameron Parish and nearby Calcasieu Parish, the rapid development of petrochemical facilities in the area has increased ship traffic. The Port of Cameron was once the country's largest producer of seafood, according to the report, but dredging and erosion stemming from ship traffic has made it hard for aquatic life to thrive: "While Cameron Parish had a fleet of 250 fishing vessels in 2005, nowadays, only a few dozen remain and some fishermen claim to see only 12 to 15 people working on the water every day, with others forced to supplement their income with additional jobs."
The report highlights that a grassroots organization in Louisiana found that ITEP applications from 1998 to 2017 pledged over 121,000 new jobs, but that the companies actually experienced a net loss of over 26,500 jobs.
The impact on communities is not just economic. According to the report, in Texas' Golden Triangle, a highly industrialized petrochemical corridor that includes the cities of Port Arthur, Beaumont, and Orange, residents breathe in polluting vapors that increase potential health harms.
"Among other pollutants, refineries produce benzene, a carcinogen that can result in leukemia or severe bone marrow damage. On average, an estimated one in 5,000 people in the Golden Triangle are at an incremental lifetime cancer risk, despite the EPA’s upper limit of acceptable cancer risk being one in 10,000," the report states.
Given the sizable tax exemptions in both Louisiana and Texas pledged for projects that are not yet up and running—in addition to the environmental degradation that is guaranteed with further expansion—the Sierra Club argues that making sure they are never built is "exactly what is necessary to avert the worst of the climate crisis."
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World On Verge of 'New Industrial Age' as Clean Energy Jobs Boom: IEA
"We're talking about new clean energy technology markets worth hundreds of billions of dollars as well as millions of new jobs," said the head of the International Energy Agency—if countries implement their climate pledges.
Jan 12, 2023
Clean energy manufacturing jobs will more than double by the end of the decade if countries worldwide live up to their climate and energy pledges, according to a report published Thursday by the International Energy Agency.
"The energy world is at the dawn of a new industrial age—the age of clean energy technology manufacturing—that is creating major new markets and millions of jobs but also raising new risks, prompting countries across the globe to devise industrial strategies to secure their place in the new global energy economy," the IEA report—entitledEnergy Technology Perspectives 2023—asserts.
The publication is a "comprehensive analysis of global manufacturing of clean energy technologies today—such as solar panels, wind turbines, EV batteries, electrolyzers for hydrogen, and heat pumps—and their supply chains around the world, as well as mapping out how they are likely to evolve as the clean energy transition advances in the years ahead."
\u201cThe @IEA's Energy Technology Perspectives 2023 is out!\n\nIt shows we're entering a new industrial age \u2013 the age of clean energy technology manufacturing\n\nThis will create new markets worth hundreds of billions of dollars & millions of jobs this decade \u2b07\ufe0f https://t.co/kb2bxOBkW5\u201d— Fatih Birol (@Fatih Birol) 1673499727
According to the paper:
The global market for key mass-manufactured clean energy technologies will be worth around $650 billion a year by 2030—more than three times today's level—if countries worldwide fully implement their announced energy and climate pledges. The related clean energy manufacturing jobs would more than double from six million today to nearly 14 million by 2030—and further rapid industrial and employment growth is expected in the following decades as transitions progress.
The report cautions that "at the same time, the current supply chains of clean energy technologies present risks in the form of high geographic concentrations of resource mining and processing as well as technology manufacturing."
For example, the three largest producers of technologies like solar panels, wind turbines, electric vehicle batteries, electrolyzers, and heat pumps "account for at least 70% of manufacturing capacity for each technology—with China dominant in all of them."
\u201cThe new global energy economy brings new opportunities, but also new risks\n\nMost steps of today\u2019s clean energy supply chains are geographically concentrated, especially for technology manufacturing\n\nThis underscores the need for diversification \ud83d\udc49 https://t.co/Z09U22Por7\u201d— International Energy Agency (@International Energy Agency) 1673559901
"Meanwhile, a great deal of the mining for critical minerals is concentrated in a small number of countries," the analysis states. "The Democratic Republic of Congo produces over 70% of the world's cobalt, and just three countries—Australia, Chile, and China—account for more than 90% of global lithium production."
IEA executive director Fatih Birol said in a statement that the new global energy economy "has become a central pillar of economic strategy and every country needs to identify how it can benefit from the opportunities and navigate the challenges."
"We're talking about new clean energy technology markets worth hundreds of billions of dollars as well as millions of new jobs," Birol continued. "The encouraging news is the global project pipeline for clean energy technology manufacturing is large and growing. If everything announced as of today gets built, the investment flowing into manufacturing clean energy technologies would provide two-thirds of what is needed in a pathway to net-zero emissions."
"The current momentum is moving us closer to meeting our international energy and climate goals—and there is almost certainly more to come," he added.
"The encouraging news is the global project pipeline for clean energy technology manufacturing is large and growing."
Birol also stressed that "the world would benefit from more diversified clean technology supply chains."
"As we have seen with Europe's reliance on Russian gas, when you depend too much on one company, one country, or one trade route—you risk paying a heavy price if there is disruption," he noted, referring to Russia's ongoing war against Ukraine.
An analysis of U.S. federal data published earlier this month by the sustainable energy development nonprofit SUN DAY Campaign concluded that wind and solar alone could generate more electricity in the United States than nuclear and coal in 2023.
A separate report released this week by the Rhodium Group, a New York-based nonpartisan research firm, found that while U.S. carbon emissions rose for the second straight year in 2022, renewable energy surpassed coal as a power source in the United States for the first time in more than 60 years.
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'Trade Rules Trump Climate': WTO Deals Blow to India's Solar Program
Providing local green jobs no match for US challenge using powerful trade rules
Feb 25, 2016
In an outcome described as an outrage and a blow for local green jobs, the World Trade Organization ruled Wednesday in favor of the United States in its challenge to India's rapidly growing solar energy program.
It marks "a step in the wrong direction, away from the climate progress that the global community committed to achieving in December's Paris climate agreement," according to Ilana Solomon, director of the Sierra Club's Responsible Trade Program.
The U.S. initiated its challenge to part of India's National Solar Mission in Feb. 2013. The problem, as the U.S. saw it, was part of India's National Solar Mission, requiring solar power developers to use solar cells and modules made in India rather than in the U.S. or another country. The WTO dispute settlement panel agreed with the U.S. that this locally-favoring requirement is "inconsistent" with and "not justified" by WTO rules.
India's solar mission also meant losses in profits for the United States. As the office of the U.S. trade representative stated following the ruling, "Since India enacted these domestic content requirements in 2011, U.S. solar exports to India have fallen by over 90 percent."
In addition, as Solomon and Ben Beachy, senior policy advisor with Sierra Club's Responsible Trade Program, write,
Though India argued that the program helps the country to meet its climate commitments under the United Nations Framework Convention on Climate Change (UNFCCC), the WTO rejected that argument. Indeed, the ruling boldly states that domestic policies seen as violating WTO rules cannot be justified on the basis that they fulfill UNFCCC or other international climate commitments. In effect, the WTO has officially asserted that antiquated trade rules trump climate imperatives.
The ruling sparked a similar reaction from Bill Waren, senior trade analyst at Friends of the Earth. "The government of India reasonably provided some preferences for local solar energy producers to convert from a carbon economy to a green economy. The WTO decision, finding India's solar energy program a violation of international trade law, is an outrage. Trade law trumps the Paris climate accord," he stated.
For its part, the Obama administration welcomed the WTO decision as a "victory" and said it sent a warning shot.
"This is an important outcome, not just as it applies to this case, but for the message it sends to other countries considering discriminatory 'localization' policies," U.S. Trade Representative Michael Froman said in a statement.
Froman and environmental groups agree that the ruling is of particular importance in light of the Trans-Pacific Partnership (TPP) trade pact, which President Obama is pushing Congress to approve.
"This win underscores not just how aggressive and successful the Obama Administration has been in terms of enforcing our current trade agreements, but also the resolve with which we will enforce the high standards negotiated in TPP, whether it's with regard to labor, intellectual property rights or the environment," Froman stated.
However, the Sierra Club says that the WTO decision should warn lawmakers to reject the TPP.
"Indeed," Beachy and Solomon write, "the text of the controversial deal replicates the rules that the WTO used against India's solar program today. While many in Congress oppose the TPP, we could see even more trade cases against clean energy initiatives if the deal were to pass. Congress should view this ruling as further confirmation that a vote against the TPP is a vote for green jobs and climate action."
The Calcutta Telegraphreports that India will likely appeal the ruling, which it has 60 days to do.
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