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RE: [greenyes] U.S. Trade Policy

Megan raises an interesting point, and one that calls out the complexity of looking at subsidy policies across sectors. For example, should all forests be subsidized, or just smaller holdings rather than large corporate ones? Should those subsidies be contingent on sound land management and sustainable harvesting? Can a single state cut back on subsidies if other states don't, or would the forests in that single state be converted to sub-divisions because timber is cheaper to hold in the states that remain subsidized?

What about the policy factors driving sub-divisions and sprawl? Certainly tax breaks for mortgage interest and property taxes both reduce the cost of owning larger houses and even multiple homes. These are among the larger of the federal tax breaks in terms of revenue losses. Similarly, a host of subsidies for connecting far flung housing also drive behavior -- water, sewage, gas and electric, and roads. In nearly every case, the pricing for remote services reflects, at most, the AVERAGE cost of infrastructure within an entire service district. The actual cost to extend complex and costly capital to remote regions with low population densities will generally be much higher.

My point? That we face a difficult situation in which subsidies to housing or roads make it very difficult to unwind the subsidies to natural resource extraction. The challenges to systemic reform can be daunting. However, in the short term it is possible to replace policies that subsidize resource extraction with more general policies that underwrite sound land management instead. This decoupling can often reduce the cost of attaining the real policy end-goal (e.g., retention of open space or wildlands); reduce, sometimes dramatically, the environmental costs of the subsidies; and can often actually increase the amount of net income that supports the actual landholders.

-Doug Koplow

Doug Koplow
Earth Track, Inc.
2067 Massachusetts Avenue - 4th Floor
Cambridge, MA 02140
Tel: 617/661-4700
Fax: 617/354-0463

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>>> "Megan Kershner" <Mkershner@no.address> 10/13/04 10:10AM >>>
I can't speak for all subsidized industries, but I do know that current
private forest tax breaks/subsidies in Wisconsin are about the only
thing keeping private forests from turning into subdivisions. Without
incentives to do the right thing, who will? Energy conservation is a
prime example.

And then I have to ask myself - is it really the tax breaks and
subsidies that is creating this waste product? Will removing the tax
breaks and subsidies change demand? Maybe.

Boise, Idaho

>>> "Reindl, John" <Reindl@no.address> 10/13/2004 7:07:23 AM >>>
On the issue of tax subsidies and the wTO, does anyone have any
about why the subsidies for mining and forestry are also not being
before the WTO?

As a recycler, I am especially concerned about the subsidies to
since paper and wood are the largest components of the material stream
we handle, and are the largest parts of what goes into landfills.

Forestry not only receives massive subsidies in the US at the federal
but also at the state and local level, through state and county
ownership of
forests that don't pay property taxes, income taxes or sales taxes,
programs to provide tax breaks for private forests, such as
which has a price tag of somewhere around $50 to $100 million a year.

John Reindl
Dane County, WI

> I would like, if I may, to ask you a question concerning basic trade

> principles, in light of the U.S. position with regard to our Airbus
> with the European Community.
> If I understand our position in that case correctly, we argue that
> trade under WTO rules is not whatever laissez-faire decrees, but
> about fair competition and a level playing field," as you were
quoted in
> October 7, 2004 Wall Street Journal ("U.S., Europe Sue Each Other at
> Over Aircraft Subsidies"). In that regard, it seems to be our claim
> Airbus enjoys excessively large tax subsidies, creating an unlevel

> field on which Boeing cannot fairly compete. We, therefore, have
> to have WTO rule that the tax subsidies are an unfair trade practice,

> subject to penalties.

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