Governor Newsom: Save lives, not fossil fuel corporations

OPINION – If your house was on fire, would you throw money at the arsonists fanning the flames? Probably not, but that’s exactly what California is doing by giving away hundreds of millions — if not billions — of dollars to fossil fuel corporations every year.

Even faced with a multi-billion-dollar deficit, Governor Newsom’s proposed state budget still includes taxpayer-funded giveaways for the oil and gas industry. It’s time for California to stop giving handouts to corporate polluters and reinvest in climate programs that create jobs and save lives.

It’s a no-brainer, really. California leaders have until June to come up with solutions to avoid billions of dollars in cuts to clean transportation programs, sustainable agriculture investments, and more. At the same time, corporations like Chevron are raking in record profits while polluting our air, water, and climate. If the governor truly wants “early action” to address the budget deficit, he should move swiftly to eliminate fossil fuel subsidies and redirect our tax dollars where they’re needed most.

To some extent, Governor Newsom understands this. He wisely proposed eliminating three subsidies that directly benefit oil and gas corporations in his draft budget released in January. If approved, these changes would save the state $22 million this year and $17 million a year going forward. It’s a start, but billions of our tax dollars remain on the table for some of the wealthiest, most polluting companies in the world to take advantage of.

Dozens of leading climate organizations, including my organization The Climate Center, and champions in the state legislature are urging the governor to go further. To put California back on track for a climate-safe future, Governor Newsom must identify and eliminate all tax breaks and subsidies for fossil fuel corporations right now.

For example, Newsom must close the Water’s Edge Election loophole, one of the most egregious laws that allows corporations like Chevron to avoid paying their fair share of taxes by hiding profits in offshore tax havens. In fact, a 2015 Senate investigation found that California-based Chevron reported $31 billion in profits through subsidiaries based in 13 different tax haven countries. Closing the Water’s Edge loophole would disincentivize the use of offshore tax havens and bring a fair share of tax revenue back to California.

Chevron — California’s largest polluter and one of five corporations named in the governor’s landmark lawsuit against Big Oil — made more than $50 billion in profits over the last two years. The company uses that money to spread misinformation and lobby against climate solutions for Californians. In fact, Chevron spent $11 million in 2023 alone to influence state leaders, the most of any company or lobbying association.

Fossil fuel corporations like Chevron don’t need or deserve handouts at the expense of taxpayers like you and me. That money should instead go to making clean cars accessible for everyone, reducing pollution from buildings, and supporting the growth of residential solar and storage — all programs currently on the chopping block in our state budget.

There’s still a window of opportunity for the governor to act. Given his focus on “early action,” Newsom should prioritize identifying and cutting all oil and gas subsidies, not climate programs. The longer we wait to invest in these life-saving programs, the more expensive it will be to weather the rapidly worsening impacts of the climate crisis. And the more taxpayer money we give to oil and gas corporations, the longer we allow them to spew deadly pollution into California communities.

Balancing the state’s budget is tricky, but this decision should be easy. Governor Newsom, eliminate all tax breaks and subsidies for fossil fuel corporations and invest in a climate-safe future for everyone.

Ellie Cohen is the CEO of The Climate Center, a climate and energy policy nonprofit working to rapidly reduce climate pollution at scale, starting in California.