Inexperienced Vitality: Largest wealth switch to the wealthy in historical past

Out of masterresource

By Steve Goreham – February 21, 2023

“Since 2000, the world has spent more than $5 trillion on green energy. More than 300,000 wind turbines have been erected, millions of solar panels have been installed, more than 25 million electric vehicles (EVs) have been sold, hundreds of thousands of acres of forest have been cleared to produce biomass fuels, and about three percent of agricultural land is now being used to produce biofuel for vehicles used.”

We are in the midst of the largest wealth transfer in history. Government-subsidized wind systems, solar panels and electric vehicles mostly benefit the affluent members of society and rich nations. The poor and middle class pay for green energy programs with higher taxes and higher electricity and energy bills. Developing countries suffer environmental damage to provide mined materials needed for renewable energy in rich countries.

Since 2000, more than $5 trillion has been spent on green energy worldwide. More than 300,000 wind turbines have been erected, millions of solar panels have been installed, more than 25 million electric vehicles (EVs) have been sold, hundreds of thousands of acres of forest have been cleared to produce biomass fuels, and about three percent of agricultural land is now used to produce biofuel for vehicles to produce. The world spends about $1 trillion a year on green energy. Government subsidies total about $200 billion annually, with more than $1 trillion spent in subsidies over the past 20 years.

World leaders are obsessed with the need for a transition to renewable energy to save the planet from human-caused global warming. Governments are providing an endless stream of funds to encourage green energy adoption. The Inflation Reduction Act of 2022 provided $370 billion in subsidies and loans for renewable energy and electric vehicles. But renewable subsidies and mandates overwhelmingly favor the rich members of society at the expense of the poor.

Wind turbines receive production tax credits, property tax exemptions, and sometimes receive payments even if they don’t generate electricity. Landowners receive up to $8,000 per turbine each year from wind farm leases on their land. Rental income can be quite high for a property owner with many turbines. In England, ordinary taxpayers pay hundreds of millions of pounds a year in taxes, which are channeled as subsidies to wind companies and wealthy landowners.

In the US, 39 states currently have net metering laws. Net metering provides credit for electricity generated by rooftop solar panels and fed back into the grid. Solar generators typically get credits at the retail electricity price of about 14 cents per kilowatt hour. This is a subsidized remuneration that is more than twice as high as the approximately five cents per kilowatt hour that power plants generate. Apartment dwellers and homeowners who cannot afford to install rooftop solar panels are paying higher utility bills to subsidize homes that receive net meter credits. Rooftop solar system owners also receive federal and state tax incentives, another wealth transfer from ordinary citizens.

The U.S. federal subsidy of up to $7,500 on each EV purchased, plus additional government subsidies, directly benefits EV buyers. The median price of an electric vehicle in the US last year was $66,000, which is prohibitive for most drivers. A 2021 University of Chicago study found that California electric vehicle owners drive just 5,300 miles per year, less than half the mileage of a typical car. Most electric cars in the US are second-cars for the rich.

A mid-size electric car needs a battery that weighs about 1,000 pounds to provide acceptable range. Because of battery weight, electric vehicles are typically about 50 percent heavier than gasoline cars, resulting in increased road damage. But EVs don’t pay the road tax that’s included in the price of each gallon of gas. EVs should pay higher road taxes than conventional cars, but today those costs are borne by ordinary petrol car drivers.

Renewable systems require huge amounts of specialty metals. Electric car batteries require cobalt, nickel and lithium to achieve high energy density and performance. Magnets in wind turbines require rare earth metals such as neodymium and dysprosium. Large amounts of copper are essential for EV motors, batteries, wind and solar arrays, and power transmission systems to connect to remote wind and solar sites. According to the International Energy Agency, an electric vehicle requires about six times as many specialty metals as a gasoline or diesel car. A wind turbine requires more than ten times the metals of a natural gas power plant, based on the electricity supplied. Most of these metals are mined in developing countries.

Almost 70 percent of cobalt is mined in the Democratic Republic of the Congo. Indonesia produces more than 30 percent of the world’s nickel. Chile produces 28 percent of copper. China produces 60 percent of the rare earth metals. These nations struggle with serious air and water pollution from mining operations. Mine workers also suffer from poor working conditions and the use of forced and child labour. But apparently no price is too high for the rich in developed countries to drive a Tesla.

To top it off, the European Union recently approved a Carbon Border Adjustment Mechanism (CBAM). The CBAM will tax goods that come from poor countries and are not manufactured using low-carbon processes. CBAM proceeds will be a great source of funding for Europe’s green energy programs that benefit the wealthy.

In January, California, Connecticut, Hawaii, Illinois, Maryland, New York and Washington proposed a billionaire wealth tax. It is interesting to note that all seven of these states mandate and heavily subsidize wind, solar and electric vehicles that transfer wealth from poor and middle-class residents to the same billionaires.


Steve Goreham is an energy, environment and public policy speaker and author of Outside the Green Box: Rethinking Sustainable Development, reviewed here. You can find his previous contributions to MasterResource here.

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