Pulped Intentions

The Nation's Chris Hayes has written a great story illustrating how Washington and environmental policy work together to create wasteful stupidity. 

Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. And get this: even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry–handsomely–to use more fossil fuel. “Which is,” as a Goldman Sachs report archly noted, the “opposite of what lawmakers likely had in mind when the tax credit was established.”

What happened?! Read the whole thing. It's a terrific example of unintended consequences. Chris says, “I've come to expect that even nobly conceived laws will be manipulated and distorted for private ends. But once in a while I hear a story that gives me the queasy feeling that I'm nowhere near cynical enough.”

Author: Will Wilkinson

Vice President for Research at the Niskanen Center