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It's a complex question. In trying to answer it, one should keep in mind that the tax incentives for fossil fuel production dwarf the $15 billion per year or so

It's a complex question. In trying to answer it, one should keep in mind that the tax incentives for fossil fuel production dwarf the $15 billion per year or so that supports renewable energy. In addition, fossil fuels impose an estimated $200 billion/yr in social costs (external costs), in the form of pollution, etc. And it would be hard to estimate how much of our defense spending should be attributed to the need to secure the middle Eastern oil supply.

rayiner 9y ago
The Harvard study estimated the negative externalities of coal at 200-500 billion annually. The study estimates the effective subsidy from not including these costs at 9-27 cents per kilowatt hours.
- ErikVandeWater 9y ago
  Not taxing a negative externality is a 'subsidy'? This a huge stretch. If this is true, the government must be subsidizing obese men to wear banana hammocks.
  - rayiner 9y ago
    Say the government decided to let Wal-Mart park delivery trucks on your property for free (i.e. decline to enforce your property right in favor of a business). Economically, it'd be indistinguishable from a subsidy. Shareholders don't care whether the government policy increases Wal-Mart's revenue or decreases its expenses. The same is true for power generation.
    - IsaacL 9y ago
      But with the level of compensation people think energy producers should pay to offset their "negative externalities" -- if governments forced them to pay it, the price of energy would rise by a huge amount, disrupting the economy, and making the previous calculation of the externalities meaningless. Even the renewables would then need more subsidies, to pay for increased manufacturing costs and the fuel for the trucks that repair their transmission lines. Point is its obviously misleading to say that fossil fuels are more heavily subsidied than renewables. People who hear that will assume that fossil fuel companies are being given taxpaper money, as the renewable companies are, when that is not the case. I don't think lumping together "companies that receive free money" and "companies we think should be fined" is an honest way to frame the situation.
      - leephillips 9y ago
        "People who hear that will assume that fossil fuel companies are being given taxpaper [sic] money, as the renewable companies are, when that is not the case." That is in fact the case. Here is just one component of those direct subsidies, as reported by the U.S. Treasury Department: https://www.treasury.gov/open/Documents/USA%20FFSR%20progress%20report%20to%20G20%202014%20Final.pdf https://www.treasury.gov/open/Documents/USA%20FFSR%20progres...
      - harryh 9y ago
        When the true costs of coal are not being paid by those that use coal based electricity the economy is already being disrupted. More coal than would be economically efficient gets consumed because coal based electricity is artificially cheap. Implementing pigovian taxes repairs the existing disruption. Do not fall prey to status quo bias!
    - ErikVandeWater 9y ago
      But then every negative externality not taxed is subsidized. It dilutes the meaning of subsidy because with this new definition government accounting doesn't make sense - the government is 'paying' trillions to subsidize all kinds of negative externalities (but it never actually does). Also, if the government actually subsidizes a negative externality, you're in a thicket, since some of it is a real subsidy and some of it is the estimated negative externality subsidy.
      - sqeaky 9y ago
        Let the lexicographers deal with the semantics and meanings words. Simply put fossil fuels create a lot of problems they doesn't pay for. You are paying with your lungs to line the pockets of Exxon shareholders.
crdoconnor 9y ago
Added to which the cheapest solar panels in China are often subjected a tariffs of up to 60%. The "coal/gas/nuclear funded free markets lobby" (ALEC, etc.) who whine incessantly about hairdresser licensing went awfully quiet about that one.
- bsder 9y ago
  > Added to which the cheapest solar panels in China are often subjected a tariffs of up to 60%. Because they were both substandard and being dumped. And they drove a lot of reliable US manufacturers under. In addition, a LOT of installers went under because the warranty they offered assumed that they wouldn't have to show up again for 10 years. 3 years on they're getting warranty calls because the solar cells were failing. Of course, the Chinese manufacturer was nowhere to be found. There is a big difference between disposable electronics being too cheap and a capital expense being too cheap. Until US businesses can sue Chinese businesses for bad practices and win "the market" won't sort itself out. In the meantime, tariffs are a good working solution.
  - sqeaky 9y ago
    The market figures this kind of stuff out. Reputable installers won't use the cheap cells and will warn their customers off the cheaper selling stuff that won't break in a few years. If the market couldn't things like double and triple pane windows wouldn't be able to out-compete single pane windows. We have done it with other goods too. American car companies got away with selling substandard stuff for a long time but revenues kept shrinking as Americans bought more foreign brands. It a major market disruption and a bailout for the car companies to right themselves. Sometimes it takes a while, sometimes a touch of government regulation makes it happen faster but when a business do shady stuff they punish themselves in the long run if there are legitimate options competing with them in the market.
    - bsder 9y ago
      > The market figures this kind of stuff out. Reputable installers won't use the cheap cells and will warn their customers off the cheaper selling stuff that won't break in a few years. How many years does your reputable solar cell manufacturer need to survive to allow the market to "figure it out"? And where does he get the money to do that? "The market can remain irrational longer than you can remain solvent" applies to more than just shorting stocks. That was the issue. The domestic manufacturers were going bankrupt waiting for the market to figure out that the Chinese cells would die prematurely. Of course, once all the domestic manufacturers are bankrupt, "the market" no longer matters because all you can get are the crappy Chinese cells.
tpallarino 9y ago
Don't forget the Iraq war. Edit: Nvmd, you didn't
- mason240 9y ago
  What about it?

rayiner 9y ago

The Harvard study estimated the negative externalities of coal at 200-500 billion annually. The study estimates the effective subsidy from not including these costs at 9-27 cents per kilowatt hours.

ErikVandeWater 9y ago
Not taxing a negative externality is a 'subsidy'? This a huge stretch. If this is true, the government must be subsidizing obese men to wear banana hammocks.
- rayiner 9y ago
  Say the government decided to let Wal-Mart park delivery trucks on your property for free (i.e. decline to enforce your property right in favor of a business). Economically, it'd be indistinguishable from a subsidy. Shareholders don't care whether the government policy increases Wal-Mart's revenue or decreases its expenses. The same is true for power generation.
  - IsaacL 9y ago
    But with the level of compensation people think energy producers should pay to offset their "negative externalities" -- if governments forced them to pay it, the price of energy would rise by a huge amount, disrupting the economy, and making the previous calculation of the externalities meaningless. Even the renewables would then need more subsidies, to pay for increased manufacturing costs and the fuel for the trucks that repair their transmission lines. Point is its obviously misleading to say that fossil fuels are more heavily subsidied than renewables. People who hear that will assume that fossil fuel companies are being given taxpaper money, as the renewable companies are, when that is not the case. I don't think lumping together "companies that receive free money" and "companies we think should be fined" is an honest way to frame the situation.
    - leephillips 9y ago
      "People who hear that will assume that fossil fuel companies are being given taxpaper [sic] money, as the renewable companies are, when that is not the case." That is in fact the case. Here is just one component of those direct subsidies, as reported by the U.S. Treasury Department: https://www.treasury.gov/open/Documents/USA%20FFSR%20progress%20report%20to%20G20%202014%20Final.pdf https://www.treasury.gov/open/Documents/USA%20FFSR%20progres...
    - harryh 9y ago
      When the true costs of coal are not being paid by those that use coal based electricity the economy is already being disrupted. More coal than would be economically efficient gets consumed because coal based electricity is artificially cheap. Implementing pigovian taxes repairs the existing disruption. Do not fall prey to status quo bias!
  - ErikVandeWater 9y ago
    But then every negative externality not taxed is subsidized. It dilutes the meaning of subsidy because with this new definition government accounting doesn't make sense - the government is 'paying' trillions to subsidize all kinds of negative externalities (but it never actually does). Also, if the government actually subsidizes a negative externality, you're in a thicket, since some of it is a real subsidy and some of it is the estimated negative externality subsidy.
    - sqeaky 9y ago
      Let the lexicographers deal with the semantics and meanings words. Simply put fossil fuels create a lot of problems they doesn't pay for. You are paying with your lungs to line the pockets of Exxon shareholders.

crdoconnor 9y ago

Added to which the cheapest solar panels in China are often subjected a tariffs of up to 60%. The "coal/gas/nuclear funded free markets lobby" (ALEC, etc.) who whine incessantly about hairdresser licensing went awfully quiet about that one.

bsder 9y ago
> Added to which the cheapest solar panels in China are often subjected a tariffs of up to 60%. Because they were both substandard and being dumped. And they drove a lot of reliable US manufacturers under. In addition, a LOT of installers went under because the warranty they offered assumed that they wouldn't have to show up again for 10 years. 3 years on they're getting warranty calls because the solar cells were failing. Of course, the Chinese manufacturer was nowhere to be found. There is a big difference between disposable electronics being too cheap and a capital expense being too cheap. Until US businesses can sue Chinese businesses for bad practices and win "the market" won't sort itself out. In the meantime, tariffs are a good working solution.
- sqeaky 9y ago
  The market figures this kind of stuff out. Reputable installers won't use the cheap cells and will warn their customers off the cheaper selling stuff that won't break in a few years. If the market couldn't things like double and triple pane windows wouldn't be able to out-compete single pane windows. We have done it with other goods too. American car companies got away with selling substandard stuff for a long time but revenues kept shrinking as Americans bought more foreign brands. It a major market disruption and a bailout for the car companies to right themselves. Sometimes it takes a while, sometimes a touch of government regulation makes it happen faster but when a business do shady stuff they punish themselves in the long run if there are legitimate options competing with them in the market.
  - bsder 9y ago
    > The market figures this kind of stuff out. Reputable installers won't use the cheap cells and will warn their customers off the cheaper selling stuff that won't break in a few years. How many years does your reputable solar cell manufacturer need to survive to allow the market to "figure it out"? And where does he get the money to do that? "The market can remain irrational longer than you can remain solvent" applies to more than just shorting stocks. That was the issue. The domestic manufacturers were going bankrupt waiting for the market to figure out that the Chinese cells would die prematurely. Of course, once all the domestic manufacturers are bankrupt, "the market" no longer matters because all you can get are the crappy Chinese cells.

tpallarino 9y ago

Don't forget the Iraq war. Edit: Nvmd, you didn't

mason240 9y ago
What about it?