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USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017 https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Global-Fossil-Fuel-Subsidies-Rema

• makomk 7y ago
  That big headline $5.2 trillion figure isn't money that was spent on anything. They're counting the difference between the actual market price of fossil fuels and what they think should be charged for them due to air pollution etc as a subsidy.
  • bildung 7y ago
    If the society knowingly pays the difference between market price and actual price, that effectively is a subsidy. Edit: That money is actually spent, though indirectly through health care etc.
  • SamBam 7y ago
    At least some of that was, in fact, hard cash subsidies. The US spends around $35 billion/year in actual subsidies on fossil fuels.[1] (About $20 billion to producers, and about $15 billion to consumers. Further more, the cost of not charging the fossil fuel industry for carbon emissions should absolutely be counted as a real subsidy, although its value is harder to calculate. But we force industries to clean up other pollutants, or we otherwise regulate their environmental impact, which costs them. If we gave one industry a pass on those regulations, that would be uncontroversially a subsidy. 1. https://www.theguardian.com/environment/climate-consensus-97-per-cent/2018/jul/30/america-spends-over-20bn-per-year-on-fossil-fuel-subsidies-abolish-them https://www.theguardian.com/environment/climate-consensus-97...
    • roenxi 7y ago
      But since any activity changes the environment for the worse, by that logic everything is subsidised. We can't use language that way - words become meaningless. Logically it goes straight to a silly place where everyone is getting 'welfare' because the government isn't taxing them for breathing out CO2. A subsidy is the government forcing more resources to be allocated to something than people with money think is good. An externality is when we believe that outcomes are affecting people who weren't the buyer/seller. The environmental lobby wants to claim that fossil fuels are subsidised therefore we must stamp them out because it is Free Market. Charitably speaking, that really just shows the environmentalists are making an effort to use other people's language but don't understand the free market philosophy at a fundamental level. If the use of something has to stop for environmental reasons then it is taxed. Claiming that it is really reversing a subsidy comes out more as trying to shout the opposition down by changing what words mean on them. It is bad form.
      • danans 7y ago
        > A subsidy is the government forcing more resources to be allocated to something than people with money think is good. An externality is when we believe that outcomes are affecting people who weren't the buyer/seller. In common speech "subsidize" is frequently used in the context of people being made to involuntarily bear externalities. For example, people who live in areas with a lot of truck traffic often complain that they are being forced to "subsidize" trucking due to the damage to their local roads. What they mean is that they are being forced to bear the externality of excessive road damage, not that they are literally writing a check to the trucking company.
        • tapland 7y ago
          They are specificly using that word to get the same errendous implication. They aren't subsidizing trucking, but saying they are instead of 'our roads get worn faster' makes it easier to lobby for changes or money to improve the road. I.e. You are demonstrating the exact same error but don't seem to understand what's going on with the use of the word.
  • nmeofthestate 7y ago
    Some of it is heating subsidies for the poor, which gives a misleading impression, unless we're planning for the poor to freeze once we've transitioned to renewables; the subsidy will simply transfer across.
    • AnthonyMouse 7y ago
      The existing subsidies are often specific to fossil fuels (heating oil and natural gas). You don't get them for installing electric heat pumps. The better alternative would be to provide the subsidy in cash and let the poor decide what they need for themselves, instead of trying to choose for them between heating oil vs. investing in heat pumps vs. better insulation vs. turning down the thermostat and using the money for something else they need more.
      • darksaints 7y ago
        You give them the money, and they'll spend it on blackjack and hookers. Regardless of whether you give them subsidy money, you have to charge higher prices for energy if you want any hope of reducing fossil fuel use.
        • AnthonyMouse 7y ago
          > You give them the money, and they'll spend it on blackjack and hookers. Stuff is fungible. If you give someone money for heating oil then they'll spend it on heating oil and use the money they would have spent on heating oil for blackjack and hookers if they want to. The only thing you're really doing is forcing them to buy heating oil instead of actual substitutes for burning more heating oil, like heat pumps or better insulation. Because one way or another they need to heat their living space, but if you satisfy that requirement for them in a specific way, it still frees up resources that they would have had to use for that and can now use for unrelated things like blackjack and hookers.
        • ClumsyPilot 7y ago
          I would say that's an administrative issue that's a bit tangential.
  • mikeash 7y ago
    Which is to say, it’s a subsidy that we pay with people’s health and people’s lives.
  • darksaints 7y ago
    Accounting isn't just lying with numbers. Those are real costs whether they're paid for in cash or otherwise. They may be hard to estimate, but they're real costs. For example, if you build roads and don't charge users to use them, they are going to use those roads more than if you charged users the costs that they incur for construction and maintenance. Building roads but not charging for their use is a subsidy to vehicle use, which is also a subsidy to all of the inputs of vehicle use, including mining, manufacturing, and yes, fossil fuel consumption. The same goes for environmental costs. You either pay for them with cash or you pay for them with a destroyed environment. And even with a destroyed environment, you're probably still paying in cash, just indirectly, deferred substantially, and with significant interest.
• tryitnow 7y ago
  A few things: 1) That's not what was spent, it's what this paper projected was spent. 2) I think this paper is defining subsidy in a way that we don't usually use that word. They're calling the costs associated with anthropogenic climate change and pollution "subsidies", most people would just call those things "costs." Using the word "subsidy" implies that governments are actively taking tax dollars and giving it to fossil fuel companies and consumers. That doesn't appear to be what's going on for the most part. Look at Figure 4, the bulk of the so-called "subsidies" are "global warming" and "local pollution" those aren't what most people would call subsidies, they're costs. I'm saying this just to clarify things, personally I am supportive of massive tax increases on carbon and massive subsidies for renewables.
  • WhompingWindows 7y ago
    This feels like definition-specific and ultimately, it's semantics. If you say subsidy is giving tax dollars to fossil fuel companies, isn't not taking tax dollars from them for their costly pollution effectively the same outcome? The important point is that fossil fuels receive far more government support than renewables do.
  • gridlockd 7y ago
    > That's not what was spent, it's what this paper projected was spent. It's not even what was actually spent, but what the projected economic cost was due to externalities such as excess mortality from air pollution. So, if someone from the US dies due to air pollution, that's 6.1 million dollars down the drain. The report puts that rate at 4.9 deaths per thousand, which is absurdly high in my estimation.
  • mikeash 7y ago
    It’s an unconventional way to use “subsidy,” but I think it fits. Imagine a garbage company. The government pays them so they can buy land where they dump their garbage. Obviously a subsidy. Now, let’s say the government buys the land themselves then gives it to the company for dumping. No money changes hands but this is still pretty clearly a subsidy. Instead of giving the company land, the government retains ownership, but lets the company dump there for free. Still a pretty clear subsidy. Instead of buying the land, the government just takes it. Now no money is involved at all, but it’s still a subsidy. Instead of taking the land, the government just declares that it’s legal for the garbage company to dump trash on other people’s land, and the owners just have to deal with it. This is quite different in the details from the original subsidy, but the overall effect is essentially the same. Polluters are in a situation that’s exactly like this last scenario. They get to dump their trash on everyone’s property and don’t have to pay for the privilege. They’re being subsidized in an amount equal to whatever payment it would take to get everyone to willingly accept this trash.
• gridlockd 7y ago
  These calculations are made up from more or less arbitrary numbers and assumptions. Let me make a similar spurious calculation, but from the other side of the fence: Renewable subsidies in the US cost 14 billion/year, which could be spent on cancer research instead. The average cancer drug costs 1,4 billion dollars to develop, so renewable subsidies are equivalent to 10 cancer drugs. Let's say that there's 30,000 cases of cancer annually that each of these drugs can treat successfully. Let's take the "mortality value" of $6,1 million per US citizen straight out of the IMF report: That's 10 x 30,000 x 6.1million = 1.83 trillion dollars. In other words, by using the same kind of spurious reasoning, fossil fuel subsidies in the US alone would account for almost two trillion dollars.
• macspoofing 7y ago
  >"hey fossil fuels, let's 1v1" sincerely, solar Let's do it. Let's see how well solar does at night, or on a cloudy day, or during winters, or evenings, or early in the mornings. The problem with solar (and wind) is not really the price. The problem is that it is intermittent power source that cannot, by itself, power a modern economy and there is no battery technology to bridge the intermittency gap. That's why it needs to be paired with natural gas (or bio-fuels, or another carbon-based energy source) to make it remotely viable. This is why natural gas companies are one of the biggest lobby groups for wind and solar. Worse, wind and solar are atrocious for nuclear, because nuclear cannot wind-up and wind-down the way a natural gas generator can.
  • deleted 7y ago
    [deleted]
  • WhompingWindows 7y ago
    This is one of the most blatantly pro-fossil, anti-renewable posts I have seen on HN. First off, yes there is battery technology to bridge the gap. Solar+battery storage is an increasingly common purchase for utilities today, there are home-batteries for purchase for consumers from multiple companies. To say battery storage doesn't exist and isn't cheaper than oil/coal grid power is simply false. Second, renewables can have higher capacity factors than many fossil-fuel plants, so saying they're intermittent and fossil-fuel is not is false. Surely, solar is weaker in winter, but wind is stronger at night, and seasonal storage is the main issue here. Yes, we will be using natural gas for winter and certain Northerly regions for decades to come, but it will become increasingly niche/reserve as batteries, solar, and wind get even cheaper. Renewables absolutely do not need to be paired with natural gas to make it "remotely viable". There are numerous markets with very high % of renewables already, and it turns out utility operators are very smart and know how to plan very well. Renewables can reach very high market penetration, given solar is a day resource and wind is a night resource, in general. The main issue is bringing demand response online to tailor your loads to fit your renewables: charge EVs, batteries, use AC/heating, industrial processes, all can be tailored to the price of electricity, given a smart utility.
    • 7y ago
• tomatotomato37 7y ago
  It's not honest to use vaguely defined externalities defined as subsidies when they influence the results this much: https://imgur.com/a/HioRu4X https://imgur.com/a/HioRu4X
  • darksaints 7y ago
    It's not? Our externalities might literally put some nations completely underwater. How much would it cost to raise the entire Maldives by 1 meter?
    • tomatotomato37 7y ago
      Might is a big word. Climate change might cause the Earth to turn into Venus, or it might just involve nation's doubling thir seawall budgets. Climate studies have wide error bars.
      • darksaints 7y ago
        And you might die tomorrow, so stop saving for retirement? I would imagine the error bars on a 1m sea rise to be a lot narrower than the error bars for Earth turning into Venus.
      • dwaltrip 7y ago
        You almost had a good point, but we know for a fact that simply doubling sea wall budgets is a dramatically inadequate response to climate change. For example, obviously that won't do anything to mitigate the temperature increases, agricultural problems, or ecological damage.
      • shkkmo 7y ago
        What is your point? In this case "might" is used quite responsibly and arguably, understates the likely-hood. While the error bars on how much ocean level rise we will see are fairly large, the chances that some (small island) nations are going to be put completely underwater are fairly close to guaranteed.
  • 7y ago
• darksaints 7y ago
  From a transportation standpoint, this is far more nefarious than people recognize at first glance. Cars and transit are economic substitutes: if you make one cheaper, you take users from the other. That much is a given, but people underestimate the impact this has on transit finances. Transit is mostly a fixed cost business (step-fixed cost technically). That means that the marginal rider brings marginal revenue, but no additional costs. Transit operations have a break-even point: when you have X riders, you break even. Anything more is pure profit, and anything less is a negative cash flow. When you rob transit of customers by subsidizing cars, you make transit less sustainable. Subsidizing cars literally means you'll end up subsidizing transit too. The opposite is true, and it's provable: Transit is dramatically more profitable in countries where driving is less subsidized. It was wildly profitable in the US too, before we started subsidizing cars. The answer to getting more transit funding isn't to pay more in general fund taxes or fares, it is actually to tax road users. Tax road users appropriately, and transit will have more more users, more revenues, and little to no increase in costs. A 5% reduction in car use could double transit ridership nationwide. Oh, and our roads will have more maintenance funding, less congestion, and less wear and tear. A win-win if there ever was one.
  • mikepurvis 7y ago
    Sounds to me like another coastal hippie who hates the middle class. Literally we're in the middle of this fight right now in Canada with carbon taxes. The right wing party is losing their mind over a 4c/L price hike on gasoline even though there was an upfront rebate before the tax kicked in this summer. Check out the madness: https://arealplan.ca/about-our-plan/#failedTrudeauCarbonTax https://arealplan.ca/about-our-plan/#failedTrudeauCarbonTax So we know where we need to go. What's the sane political path that gets us there?
    • darksaints 7y ago
      Canada is doing it the best way that I know how. Calculate the funding gap that is made up by general fund taxes, charge it directly via road use taxes or gas taxes, and then allocate the general fund savings to everybody in the form of a tax refund. Then you have to sell it, and that's where Canada doesn't seem to be doing it right. For the vast majority of road users, this would be a net win. For those that drive a lot of miles, to the point where it would not be a financial win, it's still a quality of life win: most of the cost is offset, and some of it goes towards reducing traffic and having better roads to drive on. Those points need to be hammered home. Hell, I'm mostly a tax-hating libertarian, but I'm practically begging for this.
• ThomPete 7y ago
  If you want to play that game then sure. They factor in what they should have been paid because of externalities. What should then be deducted because of the positive externalities? All the positive things that are the very reason why most of us are even alive today which is a direct consequence of fossil fuel. Without fossil fuels, we would be living like they do in the poor areas of the world.
  • triceratops 7y ago
    The positive externalities already have a market value i.e. people are willing to pay for them and already do so.
    • AndrewGaspar 7y ago
      The market value is lower than the maximum value that would be paid for fossil fuels because pretty intense competition drives the price down pretty close to marginal costs. Fossil fuels (obviously) aren't capturing all of the value they produce.
    • ThomPete 7y ago
      Then they wouldn't be externalities.
      • triceratops 7y ago
        I looked up the definition of externality again - you're right. Then there are no positive externalities of fossil fuels. All of their benefits are already priced into their cost. Otherwise someone would be profiting off the arbitrage no?
        • ThomPete 7y ago
          There are so many positive externalities that it's not even possible for me to list all of them but let me give you a couple of examples. Our use of fossil fuels secures: Safer environments: (access to water, safer buildings, the ability to build infrastructure, healthier citizens, food supply security) The ability to innovate: No matter which innovation you want to talk about it requires fossil fuels, without fossil fuels no ability to innovate like we don. All of the alternative energy developments require access to fossil fuels). Dual use. You can use oil from so many different things pesticides, plastic, energy, medicin, building materials, steel and I could go on. This is from the same "mining" of one material. What do you think it would cost the environment if you had to pick different material up for each of the things fossil fuels can be used as. These are advantages not built into the price of oil. You don't pay for that but that's what you get. There is currently no realistic useful alternative to fossil fuels and no person I know who started looking into this came out negative about fossil fuels. Yes, there are some negative consequences as with all other things we do in life but they are by far dwarfed by the positive attributes. Nature doesn't give us a safe and friendly environment we made unsafely, it gave us a hostile and dangerous environment we through our use of fossil fuels have managed to make much much safer.
• blacksqr 7y ago
  The US government lets oil companies get away with drastically underpaying royalties for oil extracted from federal land. That's pretty close to a direct cash subsidy. The government could deal with its deficit problems and have a de facto carbon tax just by auditing the oil companies and making them pay the royalties they agreed to pay.
  • tachyonbeam 7y ago
    Are there actual direct tax breaks, direct government funding for oil companies? I'm pro-solar, a TSLA investor, but also feel it seems dishonest to use the word subsidy to mean long-term environmental costs. Those costs are obviously not good for us, but they are not subsidies per-se, using that word gives the impression that the government is directly wiring money to oil corporations.
• merpnderp 7y ago
  Using your definition, we could point at all the incredibly poor policy decisions the US has with China as a huge subsidy to solar and wind. China's destructive environmental and humanitarian policies are propping up solar and wind's competitiveness. Best to just stick with comparing apples to apples, or if you bring up a banana don't be shocked when someone else brings up a watermelon and you are left wondering wtf fruit has to do with energy subsidies.
• Steven_Vellon 7y ago
  Some, perhaps, but nowhere near the figure given ($5trn). Saying that they'es $5 trillion in fossil fuel subsidies makes people think that if we just cut these subsidies then we'd have $5 trillion of spare cash. That's not the case, these subsidies are really speculated externalities.
  • flukus 7y ago
    There's less direct subsidies that would free up some spare cash, like the military budget spent keeping middle eastern oil wells flowing.