Tag Archive for subsidies

Seawalls as Folly

It has recently been reported that Seaside Heights and Belmar are proposing seawalls to protect their communities. I have been studying the environment for many years and I am amazed at the folly of people when it comes to their thoughts on dealing with a dynamic system like the ocean.

More than twenty years ago Mr. Derry Bennett of the American Littoral Society who passed away in 2009 made a comment that I have always remembered. I am certain that this is a paraphrased recollection, but essentially he said that you cannot control a dynamic system (the ocean) with a static structure.

If you need proof of this, take a look at Sea Bright….look at the towns with jetties…and the damage caused by those jetties.

Seawalls cause wave action to accelerate erosion of beaches. The only way that Seabright has been able to maintain itself over the years is with massive government subsidies in the form of beach replenishment. Why, because the sea wall causes increases in erosion of the beaches.

Seawall to prevent disaster

You see, Derry was right.

Now that we are rebuilding from Sandy, we seem to forget the lessons of the past.

Need further proof? Take a look right down the road from Seaside at Island Beach State Park. Sure there was damage, but it was far less than the damage incurred in Seaside or any other community.

In part the lower level of damage was the result of a dynamic system (natural dunes) working with a dynamic system (the ocean).

I guess this quote still holds true:
“Insanity: doing the same thing over and over again and expecting different results.”
~ Albert Einstein


Some Lessons of Sandy Part 3

Last week I blogged about the power companies and our need to pay for infrastructure improvements such as selectively burying electric power lines. But what about why so many homes and businesses were lost. Who is responsible for that? I asked questions implying that the following parties are all partly to blame.

Local land use officials who allowed people to build in dangerous areas? Builders? Realtors? The people who bought in those dangerous areas?

To the best of my recollection of history, the native peoples of New Jersey did not build permanent settlements on barrier islands. Why? They knew better. These islands are simply not permanent land – masses. They are, and remain dynamically moving land – masses.

So why did we not learn from those who lived here before us? I really don’t know.

I do know that the building of permanent structures on barrier islands, in flood plains and in areas that are just above sea level is simply not sustainable development. Local officials should never have allowed such building. The State Government should never have allowed such building, but of course, the cry of Home Rule limits the State’s role here.

Builders simply build to code…and that means the bare minimum standards of health and safety. That means that the homes built at in these areas simply cannot withstand a severe storm.

And of course, people want to have vacation homes at the water, or permanent homes near the water. This creates demand and value. That means that building will continue.

 Non-Sustainable Development

But who really pays for this non-sustainable development? Each and every one of us pays for this inappropriate development.

The Federal Flood Insurance program subsidizes every building owner in flood prone areas. The premiums that are paid for this insurance simply do not cover the cost of the payouts. Thus, federal tax dollars subsidize the remainder of the development. That means that you and I pay for the homes in flood prone areas.

Private insurance companies simply will not write policies for buildings in such areas. Why? They don’t want to lose money.

So here is the draconian solution. Make the payouts that people paid for. Let them rebuild if they want. If they don’t want to take that risk, create an additional system of payouts to help them recoup some property value and find a new place to live.

If they want to continue to live in a dangerous place, they have that right. They should then pay for that right with insurance premiums that reflect the true cost of coverage. If they don’t want to pay for that coverage, then by all means let them rebuild, but at their own risk.

In other words, no more federal subsidies for the insurance should be allowed.

This may appear draconian, and by the way, I know that it is politically impossible…not even Ronald Reagan was successful at implementing this idea, but it is certainly worth discussion.


Energy Subsidies: Nuclear

We read a great deal about how clean nuclear power is with regard to CO2 emissions. Thus, we are told that this is a good investment. Is it?

The problem with all of the subsidies, and renewables are not exempt from this argument, is that those who argue for them tend to ignore the total cost of the program and the hidden subsidies that they receive. I think that Nuclear is probably one of the worst in terms of ignoring real costs vs. benefits.

First, Nuclear power has a limit on the liability risk that it has to carry in case of an accident. The total liability for a single accident is limited to approximately $500 million.

Now, there have been claims with regard to safety risk with regard to wind and solar….but let’s be real. If a wind turbine breaks, it is certainly a risk to the immediate surroundings. If a nuclear power plant has a serious accident…and we know that this can happen, I think that I am on safe ground to say that the risk is millions of times greater.

So why do we subsidize the nuclear industry? This is a long story. But the idea of “Power to Cheap to Meter” was on everyone’s mind. Clearly this has not happened.

And let’s not even get into the long term disposal requirements….Paid for partly with tax dollars….

Did you know that some radioactive waste must be stored for over 200,000 years to be safe? I mean really. How arrogant is the assumption that any society will be around to safeguard something for that long?

Heck, the New York Times reported recently on the trial of an 82 year old nun who broke into one of the most secure nuclear storage facilities in the country!!

Nuclear Energy


Energy Subsidies: Part IV

Subsidies are a public policy question. That is a reasonable position to take. It seems odd that those who complain the most about the provision of subsidies to the new, renewable energy industries and for energy conservation programs are the current recipients of some of the richest, most far reaching subsidies ever given in the past 100 years.

As to these generous subsidies, according to Pfund and Healey’s work; “What Would Jefferson Do?” Oil has received subsidies since 1918. Solar (and other renewables) have received subsidies since 1994. On an annualized average, oil has received subsidies equal to about 5 billion dollars per year since 1918 while renewables have received about .4 billion dollars per year since 1984.

To allow us to enhance our security, and maintain a sustainable standard of living, these new renewable industries must receive subsidies in the name of sound public policy in order to become mainstream. The debate is really centered on where should we place our public investments.Oil

The point here is that the tax code was used to establish a new industry about 100 years ago…oil…and it has now become a key component of the industry that is permanently enshrined in the law. When these subsidies are challenged, the oil industry warns of Armageddon to the energy supply if they are not continued.

Thus, one might argue that on a lifecycle basis, oil is apparently not sustainable without subsidies.

Solar, on a lifecycle basis has only had subsidies for about 18 years, clearly needs those subsidies to get off the ground (just like oil since 1918). On a lifecycle basis, the money spent on solar appears to represent a more sustainable use of funds as it takes advantage of a renewable energy source rather than a limited source of fossils.

Or does it? If you read my earlier post on the environmental risks of solar manufacturing and disposal, maybe that is not the case…more later.

Every company that pays taxes takes advantage of the tax code to maximize their profits…this may or may not be sound public policy…but is all based on a subsidy; aka the tax code. So how did we get to our current standard of living and security? History has shown us that with many, many public subsidies in the
19th and 20th centuries, private companies were given access to publicly owned resources allowing for inexpensive extraction…and thus, allowed to use the public trust to manufacture and build their industries. Should this continue?