Month: September 2024

Authored by Tsvetana Paraskova via OilPrice.com,

The UK government’s plan to further raise the windfall tax on North Sea oil and gas producers will drive investments away from the region while Britain still needs oil and gas for the foreseeable future, the chief executive of Harbour Energy, the largest UKCS producer, told the Financial Times.

The Labour Party, which came to power in the UK after a landslide victory in the July general election, said in July that it intends to raise the rate of the Energy Profits Levy (EPL) to 38% from 1 November 2024, from 35% now, bringing the headline rate of tax on upstream oil and gas activities to 78%, up from 75% currently. The levy will be further extended by a year to 2030.

Harbour Energy’s CEO Linda Cook has criticized the levy ever since it was first introduced by the previous UK government in 2022.

Now Cook told FT that a rise in the windfall tax would lift the barrier to attract investment in the UK even higher.

“The fiscal regime in a lot of the other countries — in all of the other countries — in which we will have a presence will be more attractive” than the UK North Sea, she added.

Earlier this week, UK offshore industry group OEUK warned that not only viable capital investment would be reduced from $18.5 billion (£14.1 billion) to just $3 billion (£2.3 billion) in the period 2025 to 2029, but the tax hike would also lead to $16 billion (£12 billion) lower tax receipts for the country compared to the current tax regime.

Last week, Equinor, the operator of one of the major new field developments in recent years, Rosebank, said it awaits clarity on the UK tax regime by the Labour government before strategizing and committing to investments in the UK North Sea.

As a result of the planned hike in the windfall tax, UK North Sea producers have already warned they are considering moving to more fiscally stable jurisdictions such as Norway.

Neo Energy said this week it was slowing down investment in light of “fiscal and regulatory uncertainty”.

The global beer industry is not only a cultural phenomenon but also a massive economic engine, contributing over half a trillion dollars to the global GDP.

From the fertile barley fields of France and Argentina to the vast manufacturing hubs of Brazil and China, the beer sector is deeply interconnected, yet it remains profoundly localized – in fact, 89% of supplies used in beer production are sourced from within the domestic markets where the beer is ultimately sold.

The Largest Beer Markets Worldwide

Recent data from Kirin Holdings offers insight into the global thirst for beer, revealing which countries dominate the market in terms of sheer volume consumed. Here are the top 10 beer-drinking countries by total consumption in 2022:

As these figures demonstrate, China, the United States, and Brazil lead the pack, together accounting for more than 40% of global beer consumption.

China: The Reigning Beer Giant

China has maintained its status as the world’s top beer consumer for an astounding 20 consecutive years. The country’s beer market is not only the largest but also one of the most dynamic. In 2023 alone, 7,000 new beer-related businesses were launched in China, reflecting the growing demand. Impressively, 90% of the Chinese beer market is dominated by domestic brands, with Snow Beer and Tsingtao leading the charge. As the fastest-growing beer market globally, China’s beer revenues are expected to hit $124.2 billion in 2024.

United States: A Shifting Beer Landscape

Ranking second globally, the United States consumes about half as much beer as China. Yet, the U.S. beer market remains robust, valued at $116.9 billion. Interestingly, the market saw a significant shift recently when Modelo Especial overtook Bud Light as the top-selling beer in the country. The American market is largely driven by domestic beers, which make up 63.6% of total sales, followed by imported beers at 23.2% and craft beers at 13.3% in 2023. This diversity reflects the varied tastes of American consumers and the evolving dynamics of the beer market.

Brazil: A Major Player in Beer Consumption

Brazil comes in third on the global list, responsible for 7.8% of worldwide beer consumption. The Brazilian beer market is poised to generate $49.3 billion in revenue by 2024. Within this market, Brahma, known for its pale lagers, stands as the most valuable beer brand. The country’s love for beer is evident in its substantial share of global consumption, cementing Brazil as a key player in the industry.

Beer Dominates the Americas

Overall, beer is the most consumed alcoholic beverage across the Americas, comprising 54% of recorded alcohol consumption. This dominance reflects the beverage’s cultural significance and economic impact in the region, underscoring beer’s unique ability to bring people together across different societies.

As the global beer industry continues to grow and evolve, it remains a fascinating example of how local traditions can shape and drive a global marketplace, creating a dynamic and ever-changing landscape. The major players—China, the United States, and Brazil—are not just consuming beer but are also influencing global trends, setting the stage for what the future of this beloved beverage might hold.

And as illustrated by Voronoi and Visual Capitalist:

Hungary and its leader Viktor Orban are once again at the center of an EU firestorm of controversy over a new work visa and residency permit policy which will allow easier access to the country for Russian and Belarusian nationals.

The central European country has long had a national card system which previously was only available to Ukrainian and Serbian citizens, which both have EU candidacy status but are not yet part of the bloc. The permit scheme was just extended to eight more countries, including Russia and Belarus.

European officials have blasted their inclusion in the visa program as essentially an open invitation for more Russian spies to come into the heart of Europe and given the ongoing Ukraine war.

Days ago a series of statements from EU officials raised “security concerns”:

“Such a mechanism is highly questionable and raises very serious security concerns,” Manfred Weber, chairman of the conservative European People’s Party (EPP) wrote in a letter sent to European Council head Charles Michel on Monday.

He argued the new visa rules could create “grave loopholes for espionage activities,” warning that the policy could “make it easier for Russians to move around” the EU’s borderless Schengen area.

Weber further described “The lack of a clear need for such a broad and unregulated entry mechanism for Russian and Belarusian workers, combined with the possibility of inadequate security screening poses questions over the consequences for Hungary and the wider Schengen area.”

He and others are demanding a formal explanation and discussion from Budapest. Critics of the policy change have said this is tantamount to handing out “easy visas” for Russians and Belarussians. 

However, Hungary has rejected what it calls “political hysteria” among EU leaders. The West has long denounced Orban’s personal closeness with Russia’s Putin and generally cooperative policies, and refusal to curtail Russian gas imports.

“There is no legal and security issue whatsoever when it comes to the national card,” Hungary’s minister for European Union affairs, Janos Boka, explained to reporters in Brussels Wednesday.

“However there is… a clear political hysteria which is created by the majority of the European parliament and certain member states,” he added.

Hungary’s change in its work permit system has been in effect since July. The controversy unleashed in its wake is yet the latest example of Orban being viewed as a ‘pariah’ within the EU. But he’s always vowed to put Hungary and its interests first.

Authored by Andrew Korybko via Substack,

The financial dimension of the Russian-Indian Strategic Partnership is qualitatively evolving as a result of the fast-moving multipolar processes that were unleashed across the world by the Ukrainian Conflict.

Russia and India are decades-long strategic partners whose contemporary relations are driven by the shared desire to accelerate tri-multipolarity processes amidst the global systemic transition, which readers can learn more about here, here, and here. This role explains the importance of their ties in today’s world, especially their financial ones, of which there are some facts but plenty of speculation. Here are three relevant reports from earlier this week that’ll then be analyzed in this piece:

* “Exclusive: Russia’s Sberbank says India business booming despite Western sanctions”

* “India weighs Russia’s ‘doable’ proposal on `SWIFT’ alternative”

* “Russia built covert trade channel with India, leaks reveal”

The first revealed that Sberbank handled 70% of Russia’s $65 billion worth of trade with India last year (mostly Russian energy exports) and opened rupee accounts for Russian clients as a means of payment and savings. Its Indian staff has surged by 150% this year alone and “There are no restrictions on its operations” inside the country. Transactions only take several hours to complete, growing Indian exports solved the prior problem of Russia’s enormous rupee stockpile, and more real-sector trade is expected.  

As for the second, this concerned Business Line’s report citing unnamed sources that India is seriously considering using Russia’s System for Transfer of Financial Messages (SPFS per its Russian abbreviation). That would facilitate expanding the use of national currencies in trade according to them. In their source’s own words, “Direct settlements in national currencies will not only help in de-dollarisation but also lead to cheaper, quicker and more efficient transactions.”

The third report is the most scandalous since it involves allegedly leaked documents that purport to prove that India has clandestinely become a major source of dual-use technologies for Russia that are paid for in part using digital financial assets. It’s possible that Russia reinvested some of its enormous rupee surplus into such projects, which is its right and India’s to do per their status as sovereign states. If true, then this would make India among Russia’s most important partners anywhere in the world, ever.

Reflecting on these three reports, it can be said with confidence that the financial dimension of the Russian-Indian Strategic Partnership is qualitatively evolving as a result of the fast-moving multipolar processes that were unleashed across the world by the Ukrainian Conflict. They’ve sought to make such progress for years already but hadn’t hitherto been able to do so, yet they’re now finally making up for lost time and at an astronomical pace at that, which speaks to their shared interests in this respect.

India conceptualizes its support of the Russian economy to not only be a friendly gesture that aligns with its own self-explanatory interests, but also as a means of preemptively averting Russia’s potentially disproportionate dependence on China, which the three analyses hyperlinked in the introduction elaborate upon. Russia feels the same way, plus India has reportedly proven itself to be more reliable than China with regards to dual-use technology, at least if that last report is even only partially true.

Considering the strength of Russo-Indo financial ties, including speculation that India is defying the US’ unilateral restrictions on dual-use technology exports to Russia, there’s reason to believe that Russia might make progress on negotiating a gas swap with Iran for supplying India as explained here. If that comes to pass, then those three can supercharge tri-multipolarity processes by pioneering their own pole of influence that could expand to include Afghanistan, Azerbaijan, and the Central Asian Republics.

Megaprojects have been growing larger globally and many of them have recently centered on the Arab Gulf Region.

Construction software company 1Build estimates that before the end of the decade, the world will see the first construction megaproject with a cost estimation exceeding $1 trillion. Right now, there are several projects underway that exceed the size of $100 billion – despite the fact that $10 billion construction proposals were considered to be megaproject just some years ago.

As Statista’s Katharina Buchholz reports, out of all nine ongoing megaprojects identified by 1Build, International Construction Magazine and Construction Review to cost $100 billion or more, four were being built in Arab Gulf States.

You will find more infographics at Statista

This includes the ambitious project of Neom City, actually a collection of futuristic towns and cities which are being built in Northwestern Saudi Arabia.

One of the developments, The Line, has received the most attention for being planned as a completely enclosed, linear city. The project was recently scaled back to a length of just 2.4 kilometers/1.5 miles (and a width of 200 meters/height of 500 meters). It is projected to house around 300,000 people by 2030 – just a fractions of its original length. Other ongoing megaprojects on the Gulf are King Abdullah Economic City North of Jeddah in Saudi Arabia and Silk City in Northern Kuwait, which will be home to the world’s future tallest building.

More expensive than Neom City is the EU’s Trans-European Transport Network. The large-scale infrastructure upgrade estimated to cost $600 billion includes the building of railway lines, roads, shipping routes and related structures in EU member countries to improve long-distance transport.

Projects on the peninsular have also suffered a setbacks, like the $250 billion, 2,000 km project to connecting GCC member countries by rail. Initially to be completed by 2018, it was halted, but planning has since resumed. A megaproject in the region that was partially canceled is entertainment and tourism complex Dubailand, initially scheduled to cost $64 billion.

Authored by Jerry Rogers via RealClearPolicy,

The U.S. healthcare system may have its share of flaws, but fortunately leading the world in healthcare ingenuity and innovation is not one of them. U.S. inventors and inventions have revolutionized the healthcare industry through a combination of brilliant minds, sheer grit, and a substantial amount of investment into research, which yields new treatments, drugs, and medical devices that benefit American patients and millions of others all around the world.

Scrappy, innovative companies are a major factor in America’s global lead in cutting edge healthcare. U.S. companies of all sizes in the pharmaceutical, medical device, and other related industries compete vigorously against each other to attract investment and produce the latest and greatest products and technologies to expand care, improve outcomes, and lower costs.

But untimely disruptions to these companies and the virtuous cycle of innovation can throw them off their missions and impact the entire market. One such distracting disruption is unfolding at Masimo, a medical technology device company that manufactures patient monitoring technology.

Masimo is under an activist investor attack by Politan Capital Management, a hedge fund founded three years ago by Quentin Koffey. Last year, Politan successfully challenged Masimo management and won two seats to the company board. This year the stakes are much higher. Politan is back for two more seats – enough to give the hedge fund total control of Masimo’s board, despite the fact that Politan has no experience running a medical tech company.

Proxy fights are more typically over a seat or two that grant influence, but not total control. Politan’s quest for an outright majority of Masimo’s board makes this proxy fight peculiar and one that should be followed closely by everyone who cares about the future of healthcare innovation.

Multiple, in-depth studies have found that proxy fights harm target companies. An analysis by Boston Consulting Group found most companies “lose between 4% and 25% of TSR [total shareholder return] within a year of an activist attack.”

Activist Insight found that companies where management’s candidates won performed better over a longer period, rising “by an average 8% after a year, compared to a 2% gain for companies where activists won at least one seat.”

But perhaps more important than the hit to share price is the most consequential impact: lost innovation. Masimo’s CEO, founder, and chairman, Joe Kiani, is up for reelection to the board. Kiani has said he will leave the company as CEO if shareholders vote him off the board in favor of Politan’s replacement.

It’s fair to say that Masimo’s future is tied to Kiani’s fate. Kiani has led the company from a startup to a publicly traded leader in patient monitoring and pulse oximetry that annually serves more than 200 million people. Fast Company recognized Masimo as one of the ten most innovative companies in 2024 across all sectors. Losing Kiani would be a massive hit to the company. (Here’s my conversation with Joe Kiani on the ‘Business of America’ Podcast).

But Kiani wouldn’t be the only loss if the hedge fund succeeds. Its COO, Bilal Muhsin, notified the board that he would resign if Kiani is forced out. Nearly 300 engineers in Masimo’s healthcare division also expressed public support for Kiani, warning that losing him would jeopardize the company’s future and that they, too, may depart if Politan assumes control.

The loss of Masimo’s executive leadership as well as its talented employee base would generate a massive disruption, effectively halting future innovations to the detriment of patients and shareholders. It’s very difficult to imagine a scenario where handing over board control to a hedge fund manager with no industry experience would result in any outcome other than major, perhaps irrecoverable, setbacks.

That avoidable outcome would be unfortunate for one of the most innovative companies in the U.S.  healthcare sector. It might also foretell other takeover attempts of companies that would rather focus on their missions than activist investors.

U.S. companies are adept at innovating. We may soon learn if those same companies can continue to do so without its leadership and best inventors.

Jerry Rogers is editor at RealClearPolicy and RealClearHealth. He hosts ‘The Jerry Rogers Show’ on WBAL NewsRadio 1090/FM 101.5 and the Federal Newswire’s ‘The Business of America’. Follow him on Twitter @JerryRogersShow.

Two and a half years after Bloomberg Opinion published advice for those earning under $300k on how to weather the Biden-Harris inflation storm—suggesting, among other things, swapping beef for “tasty meat substitutes” like lentils—we revisit whether labor economist Teresa Ghilarducci’s tips have truly shielded consumers from the fallout of failed Bidenomics.

The short answer is no. 

Let’s revisit the March 19, 2022 op-ed titled “Inflation Stings Most If You Earn Less Than $300K. Here’s How to Deal,” which Bloomberg Opinion’s X account reposted the article.

Inflation stings most if you earn less than $300K. Here’s how to deal:

➡️ Take the bus
➡️ Don’t buy in bulk
➡️ Try lentils instead of meat
➡️ Nobody said this would be fun https://t.co/HGJEoXL5ZZ

— Bloomberg Opinion (@opinion) March 19, 2022

The X post was heavily ratioed, with some users saying… 

pic.twitter.com/4Y6XXNv3QG

— The Right To Bear Memes (@grandoldmemes) March 19, 2022

pic.twitter.com/5wgHFi1e6X

— Adam Singer (@AdamSinger) March 19, 2022

The author is clearly an elitist that lives in the city. Rural Americans don’t have the option to take the bus or cut down on driving.

— Beth Baumann (@eb454) March 20, 2022

And, by the way, elites can be very wrong about their predictions… 

Using the Amazon price tracker website camelcamelcamel, prices for a 12-pack of 14.5-ounce canned lentil soup produced by Amy’s Soup sold for around $30 when the op-ed was published. Several months later, prices jumped to $50, indicating prices were elastic as demand likely soared due to cash-strapped consumers. Since the start of 2023, data from the tracking website show prices bounced between the $40s to $50s, even as high as $65. 

Meanwhile, the food inflation theme is still hot. 

Orange juice contracts in New York are hyperinflating to record highs. 

Wholesale egg prices via the Urner Barry Egg Index EBP are nearing record highs once again. 

Let’s not even get started with USDA retail beef prices per pound. 

But don’t worry—as the VP Harris team states, communist price controls will be the cure against evil supermarket chains that price gouge customers.

The higher price of breakfast food and just food in general is an alarming sign for low- and middle-income consumers. 

Last week’s Dollar General stock price crash, fueled by warnings of a “financially constrained” core customer, is merely a warning sign the economy is trending in the wrong direction. 

Authored by Huey Freeman via The Epoch Times (emphasis ours),

More than half the world’s population is deficient in micronutrients such as vitamins and minerals, according to a new study.

According to the results, published in Lancet Global Health journal, 99.3 percent of the global population is missing at least one important nutrient.

The study collected data from 31 countries to estimate micronutrient consumption in 185 countries.

“Our study is a big step forward,” Chris Free, research professor at the Harvard T.H. Chan School of Public Health, UC Santa Barbara, and co-lead author, said. “Not only because it is the first to estimate inadequate micronutrient intakes for 34 age-sex groups in nearly every country, but also because it makes these methods and results easily accessible to researchers and practitioners.”

Deficiencies in micronutrients harm health and can lead to various preventable health conditions, the researchers say.

“Iron deficiency is the most common cause of anaemia, leading to impaired cognition and adverse pregnancy outcomes. Vitamin A deficiency is the leading cause of preventable blindness globally, affecting mostly children and pregnant women,” the authors wrote in their study.

“These results are alarming,” Ty Beal, lead author of the study, said in a press release. “These gaps compromise health outcomes and limit human potential on a global scale.”

The researchers said the new study is the first to provide global estimates of inadequate consumption of 15 micronutrients critical to human health.

“These results can be used by public health practitioners to target populations in need of intervention,” the researchers added.

Seven Common Deficiencies

The researchers identified seven common micronutrients that people are deficient in, namely iodine, vitamin E, calcium, iron, riboflavin (vitamin B2), folate, and vitamin C.

Vitamin E, iodine, and vitamin C are also common deficiencies in the United States, the authors wrote.

More than half the children in the world younger than 5 years old are deficient in vitamin A, iron, or zinc.

Each micronutrient deficiency has unique consequences, with multiple deficiencies potentially lowering quality of life and lifespan. The study revealed several global deficiency rates:

Iodine (68 percent): Vital for cognitive development in infants. Iodine plays an essential role for pregnant and breastfeeding women. Common sources of iodine are iodized salt, seaweed, and seafood.

Vitamin E (67 percent): Deficiency can cause muscle weakness and impaired coordination. Nuts, seeds, and vegetable oils are common sources of vitamin E.

Calcium (66 percent): Deficiencies can cause weak and brittle bones. Dairy and fish are common sources of calcium.

Iron (65 percent): Deficiencies can cause anemia, affecting cognition and pregnancy outcomes. Red meat and eggs are common sources of iron.

Riboflavin (55 percent): Deficiencies can cause non-specific symptoms like eye sensitivity and neurological symptoms like seizures and migraines. Eggs, meat, and dairy are main sources of riboflavin.

Folate (54 percent): Folate is needed early in pregnancy to reduce the risk of stillbirths and severe birth defects of the brain and spinal cord. Nuts and leafy greens are main sources of folate.

Vitamin C (53 percent): Deficiencies can cause gum bleeding and poor wound healing. Peppers, tomatoes, and citrus fruits are common sources of vitamin C.

Other less common deficiencies include inadequate vitamin A and zinc. Vitamin A deficiencies can cause blindness and zinc helps prevent infectious disease.

The researchers found that females consistently showed higher deficiency rates for iodine, iron, and the mineral selenium.  Males, however, were more deficient in magnesium, vitamin B6, zinc, vitamin C, vitamin A, thiamin (vitamin B1), and niacin (vitamin B3).

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

A federal appeals court has granted X Corp.’s request to block part of a California state law that requires social media platforms to disclose their content moderation and anti-hate speech policies.

The U.S. Court of Appeals for the Ninth Circuit issued an order on Sept. 4 that grants X Corp.’s request for a preliminary injunction and reverses a district court’s ruling against the Elon Musk-owned social media company in a legal challenge to California’s Assembly Bill (AB) 587.

The court said the bill’s content-moderation provisions are not narrowly tailored to serve California’s purported goal of requiring social media companies to be transparent about their content-related practices, and may amount to unconstitutionally compelled speech.

“The panel held that X Corp. was likely to succeed on the merits of its claim that the Content Category Report provisions facially violate the First Amendment,” the appeals court judges wrote in their opinion.

AB 587 requires large social media companies to post their terms of service and to submit periodic reports to the California Attorney General’s office about their content-moderation practices and policies.

A key provision of the bill requires a semiannual report detailing how the platforms define six categories of content: hate speech or racism; extremism or radicalization; disinformation and misinformation; harassment; foreign political interference; and controlled substance distribution.

X Corp. argued in its lawsuit, which named California Attorney General Robert Bonta as defendant, that the law intends to pressure social media companies to censor content that the government deems objectionable and improperly compels speech in violation of the First Amendment.

“The legislative record is crystal clear that one of the main purposes of AB 587—if not the main purpose—is to pressure social media companies to eliminate or minimize content that the government has deemed objectionable,” X Corp. attorneys argued in their complaint.

In December 2023, a district court handed X Corp. a loss, denying the company’s request for a preliminary injunction. U.S. District Judge William Shubb found that the Content Category Report provisions aren’t “unjustified or unduly burdensome within the context of First Amendment law.”

Shubb acknowledged in his order that compliance with the provisions may carry a significant burden on social media companies, but he concluded that the periodic reports that include the mandated content policy and practice disclosures are merely factual and “uncontroversial.”

“The mere fact that the reports may be ‘tied in some way to a controversial issue’ does not make the reports themselves controversial,” the judge wrote in his eight-page opinion.

The district court judge determined that X Corp. was unlikely to succeed on the merits of its First Amendment claim and that the bill’s provisions are reasonably related to the state’s interest in transparency.

X Corp. appealed, leading to the Sept. 4 ruling, holding that the Content Category Report provisions likely compel noncommercial speech and probably fail the strict scrutiny standard because they are not narrowly tailored to serve the state’s transparency interest.

In reversing the lower court’s decision to deny X Corp.’s request for a preliminary injunction, the 9th Circuit instructed the district court to issue one in line with the panel’s opinion. In addition, the lower court must determine if the Content Category Report provisions can be separated from the rest of AB 587 and, if so, to determine whether any other challenged provisions should also be blocked.

A spokesperson for the California Attorney General’s office told The Epoch Times in an emailed statement that it’s reviewing the opinion and “will respond appropriately in court.”

The legal battle between X Corp. and the state of California over AB 587 is part of a broader trend where social media platforms and industry groups have pushed back against laws around content moderation on First Amendment grounds.

Recently, the 9th Circuit appeals court issued a ruling that upheld the data privacy-related provisions of California’s online child safety laws, while striking down those that required social media platforms to assess and mitigate risks of harmful content. The appeals court found that the blocked provisions likely violate free speech rights.

Authored by Jonathan Lesser via RealClearEnergy,

Like the Jeopardy! game show, green energy subsidies have been Congress’ answer to every energy policy question. The first OPEC oil embargo of 1973-74 catalyzed decades of energy policy, including the formation of the Department of Energy. Wind, solar, and hydropower subsidies began in earnest with the Public Utilities Regulatory Policy Act of 1978. Similarly, subsidies for corn-based ethanol were enacted as part of the National Energy Conservation Policy Act of 1978. Both were designed to reduce the country’s dependence on Middle East oil.

The PURPA subsidies set off a race by independent developers to construct small generating plants whose output electric utilities were required to purchase at administratively set prices. In some cases, the subsidies were independent of how much electricity the plants actually produced, creating the moniker “PURPA machines,” because their real purpose was to extract subsidies; producing electricity was secondary.

The Energy Policy Act of 1992 modified those subsidies, creating a “temporary” production tax credit for wind power and certain types of biomass generation. Congress also enacted an Investment Tax Credit, initially for solar energy, but later extended to all renewables, which could choose between the ITC and the PTC. Although the PTC was supposed to expire in 1999, it has been repeatedly extended and expanded, most recently in the Inflation Reduction Act. The PTC now includes all zero-emissions generation, including new nuclear plants. Under the IRA, the ITC has been increased, with qualifying green energy investments able to claim a credit of as much as 60% of their construction cost.

Moreover, the IRA extends the PTC and ITC until greenhouse gas emissions from electric generation fall to just 25% of their 2005 levels, after which they will be decreased gradually. According to the U.S. Energy Information Administration, the expected date for reaching that goal is 2048.

The IRA also provides subsidies for “green” hydrogen, that is, hydrogen produced from emissions-free electricity, battery storage facilities, and facilities that capture carbon and bury it underground.

Ethanol subsidies have similarly been extended and increased, with the government now subsidizing various types of biofuels and numerous states enacting clean fuel standards, which, like renewable portfolio standards, require increasing percentages of transportation fuels to be biofuels.

Congress has not been the only institution shoveling subsidies to green energy. Many states have provided their own subsidies, especially the mid-Atlantic states that are forcing ratepayers to purchase electricity from offshore wind projects at prices many times higher than the market. States have also enacted renewable portfolio standards forcing electric utilities to increasing percentages of electricity from renewable sources that would otherwise never be built.

This subsidy smorgasbord is supposed to reduce greenhouse gas emissions by promoting new clean energy technologies. It’s also supposed to accelerate economic growth by creating new “green” industries and high-paying jobs.

There is little evidence for the former. U.S. energy-related greenhouse gas emissions have decreased by almost 20% from 2005 levels primarily because natural gas has supplanted coal as the primary fuel for generating electricity. Between 2005 and 2023, electricity generation from natural gas was six times greater than generation from wind and solar combined. In 2023 alone, electricity generated using natural gas was three times greater than wind and solar generation.

Moreover, growth in subsidized wind and solar generation has distorted wholesale electric markets, begetting the need for subsidies to ensure existing nuclear plants continue operating, lest their owners shutter them and eliminate thousands of high-paying jobs. Enacting subsidies required to offset the distortions caused by other subsidies is surely one definition of economic insanity.

As for spurring new industries and economic growth, today, the U.S. solar manufacturing industry is moribund, with almost 90% of the solar panels installed in this country now produced in China. All but one of the offshore wind projects under construction or slated to be built are owned by European companies that their respective governments control.

The economic costs of these subsidies are borne by taxpayers, who must finance the additional deficit spending; electric ratepayers who, despite claims that renewable energy resources are less costly than traditional generating resources, have seen their electric rates soar; and drivers, who pay more for gasoline and diesel fuel as refineries have closed or been modified to produce subsidized biofuels.

Those higher costs for electricity and transportation fuels raise the costs of producing and distributing almost everything else, which ripples through the entire economy, reducing economic growth and destroying jobs.

As for green energy subsidies spurring the development of new, lower-cost clean technologies, there is nothing new about wind and solar generation that receives the lion’s share of subsidies. After almost half a century, neither are cost-competitive, especially when the additional costs of addressing their inherent intermittency are included—costs that others must pay. And new technologies, such as direct air capture of carbon, will only be commercially viable if the U.S. imposes carbon taxes of several hundred dollars per ton, which few politicians will be willing to do.

The overwhelming majority of green energy subsidies reward politically powerful constituencies and businesses whose primary purpose is not to build better energy mousetraps but to build only ones that qualify for the largest subsidies.

The government could instead target subsidies solely on true research and development efforts of new clean energy technologies, such as advanced and small modular nuclear reactors.

With the country deeply in debt, wasting hundreds of billions of dollars on subsidies for green energy, as the Inflation Reduction Act calls for, is an idea whose time is long past. Green energy Jeopardy! may be a lucrative game for the lucky recipients, but eventually everyone loses.

Jonathan Lesser is a senior fellow with the National Center for Energy Analytics and the president of Continental Economics.