According to The Nation, the U.S. Government is going to give $8 billion this year to the nation’s 10 largest paper companies. The reason is an odd bit of green legislation that gives a 50 cent a gallon tax credit for using fuel mixtures that are a combination of taxable fuels (such as diesel) with alternative fuels.
The process of making paper involves placing wood into a chemical mixture to separate out the cellulose fibers. The leftover material forms what is termed black liquor and it is a good fuel due to its large carbon content. Paper companies use black liquor to produce the heat and energy they need to manufacture paper.
They discovered that they can take advantage of this tax credit by simply adding diesel fuel to the mixture. It is totally unnecessary and far from green, but it allows them to make a handsome profit off of the tax credit. The attempt to engineer green behaviour has actually resulted in the exact opposite. It is amazing how every year our tax code continues to get more complex yet continues to get less and less effective.
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Posted under Climate
Written by admin on April 13, 2009
Interesting. This is what happens when government tries to force companies into doing certain things. This type of program, like the ethanol subsidy, resulted in higher food prices.
No surprise that every time the government attempts to influence outcomes, it almost always ends up all wrong. So this is $8 billion dollars that could have gone towards some other needed project (like the Veterans Administration!) but instead it will be dumped into a trough for the paper industry and its lobbyists. This is a perfect example of how going “green” has unintended consequences.
This post has been linked for the HOT5 Daily 4/14/2009, at The Unreligious Right
The government seems to forget that in most cases, the people will keep most businesses in check. The occasional government intervention in helpful, but it’s so swift and broad that it never works out as intended.
The rain forests are being burned to create crop land where they can grow rapeseed for conversion to bio-fuel for the European market, which mandates a percentage of bio.
That accounts for 30% of man made CO2.