Science Rant, Not politics: Can CO2 cause "Climate Change?"

[Coydog]

Comment submitted by National Ski Areas Association (NSAA)

Re: Docket ID No. EPA-HQ-OAR-2022-0985

Attn: EPA agency contacts Jessica Mroz, Christopher Lieske and Brian Nelson:

NSAA submits these comments in support of EPA’s Notice of Proposed Rulemaking on Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium Duty Vehicles and Greenhouse Gas Standards for Heavy-Duty Vehicles - Phase 3.

This comprehensive set of emissions standards for light-duty cars and trucks will accelerate the ongoing transition to a clean vehicles future and are projected to: result in a 56% reduction in projected greenhouse gas emissions compared with existing standards for model year 2026; improve air quality for communities across the nation; avoid nearly 10 billion tons of carbon dioxide emissions, more than twice the total U.S. CO2 emissions last year; and reduce U.S. reliance on approximately 20 billion barrels of oil imports. These improvements would complement significant investments in manufacturing provided by the Inflation Reduction Act and support our country’s efforts to tackle the climate crisis.

The ski industry has made great strides in reducing our own carbon emissions through investments in energy efficiency, green building, renewable energy, alternative fuels, mass transit, EVs and other initiatives. We welcome regulatory and legislative policies that will continue to incentivize such investment. The ski industry represents a relatively small source of greenhouse gas emissions, however, we are doing our part to take action and unify all businesses behind the common goal of addressing the critical issue of climate change. It is crucial that we take action now as a nation to lower carbon emissions and address climate change through broad-scale action to reverse the trends that threaten mountain communities and our planet.

We encourage the agency to finalize these rules next year to support our nation’s goal of cutting GHG emissions in half by 2030. We applaud the Biden Administration’s leadership position on solutions to climate change.

Sincerely,

Geraldine Link
Director of Public Policy
National Ski Areas Association

[Sgt Eddy Brewers]

I have no problem with subsidizing EVs. We have lots of subsidies for fossil fuel production through the tax code, much like we have subsides for many other endeavors, including home ownership. If we choose to subsidize EVs, so be it. It's one more subsidy in a long list. Not having to pay for gasoline/diesel taxes is a subsidy I disagree with, however, as EVs cause the same or greater wear and tear on the roads than fossil fuel vehicles. We have to figure out a way to tax them based on annual mileage or other "pay as you go" methodology.

As for being able to commute to Killington during the winter using EVs, my neighbor does that right now, having put a charging station at his house. Others use the charging stations set up around the mountain and in the surrounding area. I have no plans to purchase an EV, however, due to the inconvenience of traveling longer distances with charging stops along the way. When I make a stop to "recharge" my ICE vehicle, I can fill it up, make pit stop, purchase a snack, etc., in no more than 5 - 10 minutes. I'm not interested in having to stop longer when I'm driving 3+ hours to wherever I'm going, whether to visit family in the Boston area, head for the outer Cape, visit family in the NY metro area, etc. When that problem is solved, perhaps I'd take a look. Until then, no.

Fair enough on the subsidy issue. Lots of good info in your post. Thanks.

How far does your neighbor have to commute and... is the vehicle heated adequately?

[Mister Moose]

I have no problem with subsidizing EVs. We have lots of subsidies for fossil fuel production through the tax code, much like we have subsides for many other endeavors, including home ownership.

I'd like to dig into this a little deeper. The EV credit is a true subsidy, it is a payment from the government to offset the cost of acquiring a product. It is a payment, it is not a tax credit or deduction.

Home ownership is "subsidized" by allowing a tax deduction for a (non business use) where one otherwise would not have occurred, its value is dependent on your tax bracket.

The oil incentive's I quickly browsed were all essentially depreciation schedule modifications, or accelerated depreciation methods. They do not necessarily create any less tax revenue, they just shift the revenue farther to the future.

This one eludes me, offered up as a subsidy:
"Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically."

All costs of drilling or running the business are a cost associated with producing a product, which is always deductible, whether it's oil, candy bars, or cars.

Master Limited Partnerships are one area that does seem to favor the oil and gas industry, but is that a subsidy? Can you prove that the price per gallon at the pump wouldn't reflect a change in that tax policy, and therefore isn't a subsdidy?

What oil subsides are currently in place that create additional tax or cash credits to the oil industry, other than depreciation schedule changes?

[Sgt Eddy Brewers]

I have no problem with subsidizing EVs. We have lots of subsidies for fossil fuel production through the tax code, much like we have subsides for many other endeavors, including home ownership.

I'd like to dig into this a little deeper. The EV credit is a true subsidy, it is a payment from the government to offset the cost of acquiring a product. It is a payment, it is not a tax credit or deduction.

Home ownership is "subsidized" by allowing a tax deduction for a (non business use) where one otherwise would not have occurred, its value is dependent on your tax bracket.

The oil incentive's I quickly browsed were all essentially depreciation schedule modifications, or accelerated depreciation methods. They do not necessarily create any less tax revenue, they just shift the revenue farther to the future.

This one eludes me, offered up as a subsidy:
"Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically."

All costs of drilling or running the business are a cost associated with producing a product, which is always deductible, whether it's oil, candy bars, or cars.

Master Limited Partnerships are one area that does seem to favor the oil and gas industry, but is that a subsidy? Can you prove that the price per gallon at the pump wouldn't reflect a change in that tax policy, and therefore isn't a subsdidy?

What oil subsides are currently in place that create additional tax or cash credits to the oil industry, other than depreciation schedule changes?

As usual some interesting facts and perspectives. OK, now that makes EV subsidies less justifiable perhaps? The plot thickens?

[Sgt Eddy Brewers]

I have a pretty broad menu of sites to surf and this one can be a bit wild so... not sure this is true. But if it is, maybe a true EV breakthrough is on the way. Any thoughts from the board?

Toyota claims breakthrough that will lead to 745-mile EV battery (10 minute charge time?!?!?!)
https://principia-scientific.com/toyota ... v-battery/

[deadheadskier]

There will be both improvements in the battery technology and better optimization of the vehicles to do more with less power. I'm seeing it in my industry. The ICU monitors I sell today can run for approximately 8 hours vs the 4 hours the models of just 4 years ago did AND they do it on one LI battery vs 2. So, a fourfold improvement in efficiency in just 4 years. Like cars, ICU monitors performance (their mpgs essentially) will vary based on how hard they are used.

[easyrider16]

Maybe fun for wealthy city folks but I don't think us flatlanders can commute to Killington during the depths of winter in a current model EV.

I have a friend that regularly commutes from Massachusetts to Sugarbush in his Tesla. He absolutely loves it, particularly because of the self-driving feature on the highway. He also has chargers at both his homes, and can charge at Sugarbush while he skis. It's got a lot of benefits for him.

I'd like to dig into this a little deeper. The EV credit is a true subsidy, it is a payment from the government to offset the cost of acquiring a product. It is a payment, it is not a tax credit or deduction.

If you're referring to this one, the IRS defines it as a credit. My understanding is that they are also subject to income caps. But I think it's splitting hairs to argue over credit vs subsidy. Anything that provides a financial benefit from the government to a business is a subsidy, whether you call it a credit or an offset or what have you. I would argue that being able to take accelerated depreciation is a huge financial benefit in a capital-intensive industry like oil drilling.

I am not opposed to subsidies to high tech industries like EVs. When done wisely, they can create lots of economic growth. Judging from companies like Tesla, Rivian, and the other EV startups, as well as the new lineup of EV cars being produced by big automakers like Ford, Chevy, and GM, I'd say this one's been pretty successful in creating economic growth. One might even argue that it has paid for itself the way Republicans like to claim tax cuts pay for themselves.

[Rez]

I have no problem with subsidizing EVs. We have lots of subsidies for fossil fuel production through the tax code, much like we have subsides for many other endeavors, including home ownership.

I'd like to dig into this a little deeper. The EV credit is a true subsidy, it is a payment from the government to offset the cost of acquiring a product. It is a payment, it is not a tax credit or deduction.

Home ownership is "subsidized" by allowing a tax deduction for a (non business use) where one otherwise would not have occurred, its value is dependent on your tax bracket.

The oil incentive's I quickly browsed were all essentially depreciation schedule modifications, or accelerated depreciation methods. They do not necessarily create any less tax revenue, they just shift the revenue farther to the future.

This one eludes me, offered up as a subsidy:
"Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically."

All costs of drilling or running the business are a cost associated with producing a product, which is always deductible, whether it's oil, candy bars, or cars.

Master Limited Partnerships are one area that does seem to favor the oil and gas industry, but is that a subsidy? Can you prove that the price per gallon at the pump wouldn't reflect a change in that tax policy, and therefore isn't a subsdidy?

What oil subsides are currently in place that create additional tax or cash credits to the oil industry, other than depreciation schedule changes?

Your understanding is correct. People love to talk about oil industry "subsidies" but when you dig into it they are pretty much standard expense/cost deductions that all businesses take, especially capital intensive industries, which by the way the automotive industry is one. The EV subsidies are direct subsidies. In this case of EV's and PV systems, the government is not just saying "hey if you're a business this is what you can deduct/write off" they are actually making a direct investment of tax dollars in an industry to support its growth. Any X dollar tax credit on the purchase of an EV allows the EV supplier to sell more EV's at a given price. If you own TSLA, the EV tax credits have put money in your pocket. Literally. The idea behind the subsidies is that will prevent a climate catastrophe whose cost is far greater than the subsidies. But if this turns out wrong then you run the risk of inefficient capital allocation because it's pretty universally known the private markets allocate capital much more efficiently than the government.

[easyrider16]

...it's pretty universally known the private markets allocate capital much more efficiently than the government.

Often stated, and usually true, but not universally so. There are cases where private markets do not allocate efficiently. One of example is long term R&D. Another example is when an industry obtains a monopoly or, in the case of the auto industry, an oligopoly.

None of the big auto makers had any interest in putting any resources toward bringing an EV to market. They didn't bother to get into the game until companies like Tesla proved it was viable and that there was a market for it. But without a subsidy, those companies would have had a much harder time and may not have been successful at all.

I also want to push back on the idea that what oil companies get from the U.S. is the same sort of treatment as any other business. From what I've read, that's not the case. For example, there's a tax credit for the production of oil and natural gas from qualified marginal wells. See here: https://www.brookings.edu/articles/refo ... operation/
https://www.taxpolicycenter.org/briefin ... ssil-fuels

[Bubba]

To argue that tax credits and/or tax deductions are not the same thing as direct subsidies misses the point. A direct subsidy is simply a more direct form of subsidization than credits or deductions. Both are designed and implemented to encourage specific behaviors and decisions on the part of consumers and businesses. In the end, all are subsidies.

[easyrider16]

To that point, if you're a company like Exxon that made a $56 billion profit last year, whether you call it a "tax credit" or an "accelerated depreciation schedule," if it allows you to reduce taxable income it literally means money in your pocket.

[Mister Moose]

To argue that tax credits and/or tax deductions are not the same thing as direct subsidies misses the point. A direct subsidy is simply a more direct form of subsidization than credits or deductions. No. Both are designed and implemented to encourage specific behaviors and decisions on the part of consumers and businesses. No. In the end, all are subsidies. No.

Lets put this in skiing perspective. Should Killington be able to deduct the cost of diesel fuel from their taxable income? Is that a subsidy?
Should Killington be able to deduct the cost of a $500,000 groomer from taxable income? Is that a subsidy? What is the difference between the fuel and the groomer?

To that point, if you're a company like Exxon that made a $56 billion profit last year, whether you call it a "tax credit" or an "accelerated depreciation schedule," if it allows you to reduce taxable income it literally means money in your pocket.

OMG. You do understand that costs and expenses reduce income and is not some kind of guilty activity, whether your company makes 56 thousand a year or 56 billion ?

[easyrider16]

Lets put this in skiing perspective. Should Killington be able to deduct the cost of diesel fuel from their taxable income? Is that a subsidy?
Should Killington be able to deduct the cost of a $500,000 groomer from taxable income? Is that a subsidy? What is the difference between the fuel and the groomer?

Apples and oranges. My understanding from what I've read is that oil companies get a better depreciation deduction than Killington would for capex because they get an accelerated depreciation schedule.

OMG. You do understand that costs and expenses reduce income and is not some kind of guilty activity, whether your company makes 56 thousand a year or 56 billion ?

I think you are missing the point. I'm not saying the company is doing anything wrong. I'm saying that they are getting a subsidy from the government. That's not illegal or immoral. Unwise? bad policy? Maybe. But there is no doubt that Exxon, as a result of favorable tax law targeted specifically toward oil companies, gets to keep more money at tax time than they otherwise would without those provisions of the tax code. That, my friend, is a subsidy.

[Mister Moose]

...it's pretty universally known the private markets allocate capital much more efficiently than the government.

Often stated, and usually true, but not universally so. There are cases where private markets do not allocate efficiently. One of example is long term R&D. Another example is when an industry obtains a monopoly or, in the case of the auto industry, an oligopoly.

None of the big auto makers had any interest in putting any resources toward bringing an EV to market. They didn't bother to get into the game until companies like Tesla proved it was viable and that there was a market for it. But without a subsidy, those companies would have had a much harder time and may not have been successful at all.

I also want to push back on the idea that what oil companies get from the U.S. is the same sort of treatment as any other business. From what I've read, that's not the case. For example, there's a tax credit for the production of oil and natural gas from qualified marginal wells. See here: https://www.brookings.edu/articles/refo ... operation/
https://www.taxpolicycenter.org/briefin ... ssil-fuels

Please quote the portions that support your statement. Those are long articles, and I didn't anything relevant on a quick skim, and a search on "qualified" turned up zero results on both articles.

[Mister Moose]

Lets put this in skiing perspective. Should Killington be able to deduct the cost of diesel fuel from their taxable income? Is that a subsidy?
Should Killington be able to deduct the cost of a $500,000 groomer from taxable income? Is that a subsidy? What is the difference between the fuel and the groomer?

Apples and oranges. My understanding from what I've read is that oil companies get a better depreciation deduction than Killington would for capex because they get an accelerated depreciation schedule.

How is the oil company accelerated depreciation different from those available to Killington(POWDR)?

OMG. You do understand that costs and expenses reduce income and is not some kind of guilty activity, whether your company makes 56 thousand a year or 56 billion ?

I think you are missing the point. I'm not saying the company is doing anything wrong. I'm saying that they are getting a subsidy from the government. That's not illegal or immoral. Unwise? bad policy? Maybe. But there is no doubt that Exxon, as a result of favorable tax law targeted specifically toward oil companies, gets to keep more money at tax time than they otherwise would without those provisions of the tax code. That, my friend, is a subsidy.

So why do you feel it necessary to state 56 billion? And you're aware of other industries that have different parts of the tax code due to different natures of their business?

Lastly, why was accelerated depreciation written into the tax code? (Hint: It's not so rich guys get richer)