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Subsidy just implies that someone other than the coal industry is paying for a cost that the industry imposes. The only time the term subsidy didn't make sense

by danans 9y ago

Subsidy just implies that someone other than the coal industry is paying for a cost that the industry imposes. The only time the term subsidy didn't make sense was when we didn't know that these externalities existed. But the moment the costs were clear, not assessing them on the coal industry became a subsidy.

rb808 9y ago
Agreed. Its interesting too the external costs of not using coal. EG shutting down mines causes a lot of economic hardship in some regions of the US. Is that a subsidy for gas/solar/nuclear?
- rz2k 9y ago
  No. You also do not have standing to sue a company for decreasing the resale value of your property by releasing a new model. There absolutely can be social utility in remedying structural unemployment, but we are not in an economic system where people have a right to wages for work that is not valuable.
wang_li 9y ago
Subsidy suggests someone giving you money, as opposed to not taking your money. These are not the same thing at the margins.
- danans 9y ago
  It's a subclass of subsidy known as an "implicit subsidy": https://en.wikipedia.org/wiki/Subsidy#Environmental_externalities https://en.wikipedia.org/wiki/Subsidy#Environmental_external...
  - roenxi 9y ago
    There are assumptions in calling that a subsidy, I identified these two that I have issues with: 1) The net externalities are measurably negative 2) The coal producers should be paying them There are clear and massive positive externalities to fossil fuel, and anyone arguing otherwise needs to take a deep breath. They are the foundation of modern civilisation, and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in. If we price in all the externalities, fossil fuels probably do deserve a subsidy. The renewables debate is about whether we have an alternative that is better than the historically magical substances we call fossil fuels. Since it has a higher EROEI than solar, if we are going to start pricing in externalities I would be comfortable arguing fossil fuels deserves a higher subsidy than solar for positive externalities. I don't think that is sensible, but neither do I accept that there is an 'implicit subsidy'. The 2nd assumption is a political question that afaik has been answered in the negative. It doesn't make sense to claim that they 'have a subsidy' when the system we use to determine if they should be paying for an externality (currently) accepts that they do not have to.
    - danans 9y ago
      > They are the foundation of modern civilisation This sounds like sentimentality. We've found better ways that costs less and have fewer externalized costs. Consistent electricity at the point of use is indifferentiable as to its source. It matters little if coal got us to this point if other technologies can provide cheaper energy in less environmentally harmful ways going forward. > and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in Prosperity is not at risk with the implementation of renewables and storage. The removal of the health costs of coal-generated air pollution will increase quality of life. > unprecedented peace What exactly does coal uniquely offer in terms of supporting peace vs other sources? Also, you are conflating coal with all other fossil fuels when it suits your argument. They are not all the same. Natural gas will continue to have use as a heating fuel for a long time, but the same can't be said of coal. It doesn't have a significant use today beyond producing electricity. What is at risk are jobs in the already long-declining coal extraction, transport, and combustion industries, and the people in the regions that are dependent on those industries should be helped transition in the near term.
    - Brakenshire 9y ago
      The ability to derive useful energy from coal is not an externality, it is priced into the sale and consumption of the good.
      - roenxi 9y ago
        Just for your benefit, an externality is a cost or benefit that is incurred by a party not involved in a transaction. Cheap energy generates positive externalities. Obviously I'm not talking about the buyer and the seller of the that energy, I'm talking about the social polity at large. There are positives to having large cheap energy reserves, and those positives are absolutely not priced in to the energy market. Cheap energy is an enabler that frees resources up for other tasks. It is not a reasonable position for someone to pretend that coal is 'implicitly subsidied' because they've picked up on one negative externality and decided that it should be priced in; the net picture needs to be considered. If we were going to price in all the externalities of having such a cheap and convenient but dirty fuel it might well get an actual subsidy, but that would be silly in its own right. This is one of the major reasons why the pro-renewables crowd has such difficulty convincing anyone to price in the environmental impacts. Sure, if the debate is had and we all decide that a specific negative externality is to be priced in then I've got no leg to stand on and I'll sing a different tune. But governments so far have implicitly accepted that that negative externality should not be priced in.

by danans 9y ago

rb808 9y ago

Agreed. Its interesting too the external costs of not using coal. EG shutting down mines causes a lot of economic hardship in some regions of the US. Is that a subsidy for gas/solar/nuclear?

rz2k 9y ago
No. You also do not have standing to sue a company for decreasing the resale value of your property by releasing a new model. There absolutely can be social utility in remedying structural unemployment, but we are not in an economic system where people have a right to wages for work that is not valuable.

wang_li 9y ago

Subsidy suggests someone giving you money, as opposed to not taking your money. These are not the same thing at the margins.

danans 9y ago
It's a subclass of subsidy known as an "implicit subsidy": https://en.wikipedia.org/wiki/Subsidy#Environmental_externalities https://en.wikipedia.org/wiki/Subsidy#Environmental_external...
- roenxi 9y ago
  There are assumptions in calling that a subsidy, I identified these two that I have issues with: 1) The net externalities are measurably negative 2) The coal producers should be paying them There are clear and massive positive externalities to fossil fuel, and anyone arguing otherwise needs to take a deep breath. They are the foundation of modern civilisation, and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in. If we price in all the externalities, fossil fuels probably do deserve a subsidy. The renewables debate is about whether we have an alternative that is better than the historically magical substances we call fossil fuels. Since it has a higher EROEI than solar, if we are going to start pricing in externalities I would be comfortable arguing fossil fuels deserves a higher subsidy than solar for positive externalities. I don't think that is sensible, but neither do I accept that there is an 'implicit subsidy'. The 2nd assumption is a political question that afaik has been answered in the negative. It doesn't make sense to claim that they 'have a subsidy' when the system we use to determine if they should be paying for an externality (currently) accepts that they do not have to.
  - danans 9y ago
    > They are the foundation of modern civilisation This sounds like sentimentality. We've found better ways that costs less and have fewer externalized costs. Consistent electricity at the point of use is indifferentiable as to its source. It matters little if coal got us to this point if other technologies can provide cheaper energy in less environmentally harmful ways going forward. > and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in Prosperity is not at risk with the implementation of renewables and storage. The removal of the health costs of coal-generated air pollution will increase quality of life. > unprecedented peace What exactly does coal uniquely offer in terms of supporting peace vs other sources? Also, you are conflating coal with all other fossil fuels when it suits your argument. They are not all the same. Natural gas will continue to have use as a heating fuel for a long time, but the same can't be said of coal. It doesn't have a significant use today beyond producing electricity. What is at risk are jobs in the already long-declining coal extraction, transport, and combustion industries, and the people in the regions that are dependent on those industries should be helped transition in the near term.
  - Brakenshire 9y ago
    The ability to derive useful energy from coal is not an externality, it is priced into the sale and consumption of the good.
    - roenxi 9y ago
      Just for your benefit, an externality is a cost or benefit that is incurred by a party not involved in a transaction. Cheap energy generates positive externalities. Obviously I'm not talking about the buyer and the seller of the that energy, I'm talking about the social polity at large. There are positives to having large cheap energy reserves, and those positives are absolutely not priced in to the energy market. Cheap energy is an enabler that frees resources up for other tasks. It is not a reasonable position for someone to pretend that coal is 'implicitly subsidied' because they've picked up on one negative externality and decided that it should be priced in; the net picture needs to be considered. If we were going to price in all the externalities of having such a cheap and convenient but dirty fuel it might well get an actual subsidy, but that would be silly in its own right. This is one of the major reasons why the pro-renewables crowd has such difficulty convincing anyone to price in the environmental impacts. Sure, if the debate is had and we all decide that a specific negative externality is to be priced in then I've got no leg to stand on and I'll sing a different tune. But governments so far have implicitly accepted that that negative externality should not be priced in.