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PRI's Environmental News Magazine

The Environmental Impact of Clinton's Economic Plan

Air Date: Week of March 5, 1993

Steve talks with Jessica Tuchman Matthews of the World Resources Institute about the fundamental changes in environmental policy which she says run through the President's new economic plan.

Transcript

CURWOOD: For a domestic perspective on the President's economic plan and its impact on the environment, we turn to Jessica Tuchman Matthews to discuss several facets of the initiative. Matthews is a vice president of the World Resources Institute in Washington, and I asked her first about the impact that the proposed energy tax would have on the environment.

MATTHEWS: Well, it's going to be a small impact, but it's going to be positive, because it will signal that we need to be moving towards greater efficiency in energy use. But because it's only about a four or five percent price increase, the overall impact will be relatively small.

CURWOOD: It is a pretty small tax, as you say, and some environmentalists have said that to change people's behaviors you need much bigger taxes. Are they asking for too much too soon?

MATTHEWS: I think so. I think the administration made a smart political judgment in deciding not to push too hard, because after all, if the tax is defeated then you end up with nothing. And it's a tough tradeoff. And in addition to just the size of the tax, the question is, how narrowly do you base it? Say if you're going for 25 billion in revenues or 20 billion, the narrower you make the tax, say just on gasoline, or just on imported oil, or whatever, the higher the rate would be on that particular fuel and therefore the bigger the impact on behavior. On the other hand, the narrower you make it, the more regional inequities that you have, and the more political difficulty. So they've done a balancing job. I think they've hit it about right.

CURWOOD: And Congress is ready to pass such a tax, you think?

MATTHEWS: I think that really the President's speech signalled a beginning of a potentially new era in American politics, if the public support stays strong. I was really astonished that the overnight polls showed almost 80 percent of the American people saying they liked this package, that they thought it was fair, that they thought it was balanced, that they thought it was needed. If he can sustain that level of support, then I think Congress can withstand the inevitable attacks that will come from all the special interests.

CURWOOD: How does the President's transportation package stack up in terms of the environment, do you think?

MATTHEWS: Well, there the initial money is going to highways, because that's what's on the shelf waiting, out in the states. But the administration has been, I think, pretty clear in signalling that it wants to stay with the really dramatically different transportation priorities that Congress developed in the last two years, and indeed, Secretary Pena has said that he wants to add railroads to the mix, which Congress didn't, and which I think is a tremendously beneficial step for the environment, because rail travel is so much more energy efficient.

CURWOOD: Let's move now to public lands. There are a number of environmentally related initiatives in the President's economic package related to land, ranging from surcharges on water sales, to camping and recreation fees, to grazing fees, and some royalties on the value of hard rock minerals taken from federal lands. How will these effect the environment?

MATTHEWS: Well, to my mind, this is the big piece of environmental policy that we've seen so far, and a tremendously important one. We have a whole package of policies that are left over from the mid-19th century, when the federal government was trying to lure settlers into a harsh and empty West. This whole package of policies that have grown up providing heavily subsidized water, below-cost timber sales on which the Forest Service loses money every year, and way below-cost grazing fees that are estimated to be about a fifth of the cost on private land - these subsidies have two effects: one is, they cost the taxpayer a fair amount of money. And the other is, they encourage bad resource use. And what the Clinton administration has done is to put all of these into the same package and say, we're going to start moving towards charging the real market price for all of these resources. They haven't, by any means, gone the full way toward market prices, because I think it would have been too abrupt a transition, and too painful. But they have started the process. And that will mean an enormous shift in the West. And the one thing we haven't mentioned, and we should, that in this package also they suggest the increasing user fees for recreation. The principle is exactly the same: if you're going to charge a realistic price for the use of scarce resources, then the use of the national parks, and the national forests for hunting, and fishing, and camping ought to be included.

CURWOOD: What's your overall assessment of the Clinton economic plan and the environment?

MATTHEWS: I have to give it an "A". In a package designed - rightly so, in my view - for deficit reduction, and balancing political feasibility, they have brought in an enormous amount of policy. I think that the key theme to bear in mind is, they have tried to move toward more realistic pricing, both with respect to energy, and the subsidies. This is the direction we need to be going, and this is the way, over time, that you can get around these crisis conflicts between jobs and the environment.

CURWOOD: Well, I want to thank you. Jessica Tuchman Matthews is vice president of the World Resources Institute in Washington. Thanks for joining me.

 

 

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