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Gifts in kind aren’t subsidies? If the government gives equipment or resources or labor, rather than money, it’s no longer a subsidy? That sure doesn’t fit how

Gifts in kind aren’t subsidies? If the government gives equipment or resources or labor, rather than money, it’s no longer a subsidy? That sure doesn’t fit how I understand the term. What would you call those?

astine 7y ago
"Gifts in kind aren’t subsidies?" They can be but that's less common. The key difference is that a subsidy is direct and an active policy. For example, when people talk about subsidies for renewables, they aren't talking about any externalized costs of manufacture, which do exist, they are talking about direct government gifts and tax breaks deliberately put in place to encourage investment in renewables. When people talk about subsidies given to fossil fuels the same is true, especially when they are being compared to renewables as is the case in this discussion. Edit: removed word "decision" to clarify my meaning
- dv_dt 7y ago
  Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision. It's perhaps not a frequent point of policy discussion, but it's still a decision - particularly when we know the cost of climate crisis mitigation is so high.
  - astine 7y ago
    "Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision." No, it's a passive policy decision by definition.
    - munk-a 7y ago
      Choosing not to make a choice is a choice itself - additionally this portion of policy has been heavily debated societally - it's not like we're talking about something so obscure that actually opening up a discussion on it will require a heavy expenditure of labour to properly research the topic.
    - rndgermandude 7y ago
      Why? What definition? The refusal to collect costs those polluters put on everybody is as active an decision as the decision not to collect taxes (tax breaks) that you'd otherwise use to keep the country running for everybody. It's an active policy decision to have the state stay passive and do nothing.
    - gnud 7y ago
      It's an active policy decision in any country where a proposed "polluter pays" type law has been voted down.
- mikeash 7y ago
  Why do subsidies have to be an active policy decision? You’re right, when people talk about fossil fuel subsidies, that’s thinking of government gifts and tax breaks. My point is that this is a deeply inadequate way to think about it. If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are.
  - astine 7y ago
    "If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are." In the case of this discussion, you're looking at it backwards. The subject of fossil fuel subsidies was brought up in comparison to subsidies for renewables which in this case were already defined as specific government programs. If it weren't for that, I wouldn't be being such a stickler. However given that we are comparing renewables to fossil fuels we need to be sure that we are measuring the same thing and to include externalities when measuring fossil fuels and not when measuring renewables is to be not measuring the same thing. (I actually got confused when I first saw the IMF link so I know my concern isn't hypothetical.) Yes, I get that the case can be made that cost of using fossil fuels is more that the sum of direct gifts by the government to fossil fuel companies (fucking duh!) but that can be expressed without implying that governments gave $5.2T in tax dollars directly to fossil fuel companies in 2017. Where confusion is possible, it's best to make distinctions and clarify what is meant.
    - westurner 7y ago
      "subsidies" includes both direct and indirect subsidies. We can measure direct subsidies by measuring real and effective tax rates. We can measure indirect subsidies like healthcare costs paid by Medicare with subjective valuations of human life and rough estimates of the value of a person's health and contribution to growth in GDP, and future economic security. But who has the time for this when we're busy paying to help folks who require disaster relief services from the government and NGOs (neither of which are preventing further escalations in costs)
      - 7y ago
- rndgermandude 7y ago
  Then it's a gift in kind and a subsidy. When I litter, I get fined, but those companies are not when they litter e.g. carbon all over. When I dump chemicals into nature, I get fined for polluting the environment or even imprisoned outright, those companies do not e.g. when it's in the form of "emissions". Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions, while a lot of commercial vehicles and fuels for these vehikles get a reduced rate or even excluded from taxation. But cars here are taxed far less so than in other European countries. etc. The governments are clearly aware that pollution and dumping your garbage are things you should not do or at least minimize. They made laws against it, but actively decided to exclude certain business sectors and/or certain types of pollution, or actively decided not to regulate or tax certain types of pollution while regulating/taxing others.
  - astine 7y ago
    "Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions" Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. Taxes and subsidies are often instituted in response to negative and positive externalities, but that doesn't change the fact that they are different things. This is important when trying to draw policy comparisons which is our situation here. You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing, and that's an entirely different discussion, but it doesn't mean that they are factually the same thing. There is a practical difference in terms of how things are measured and how policies are compared across industries and governments and that difference matters.
    - rndgermandude 7y ago
      >Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. The stated policy goal in part is to reduce emissions to met climate targets to fight climate change, so yes. >You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing It is. >but it doesn't mean that they are factually the same thing. First of all, the meaning of words and political concepts are never factual. But I'd still argue that at a high level they are the same, and both are subsidies. In both cases the government refuses money it would otherwise collect from different parties, thereby gifting those entities value you can put a price tag on. Those decisions are active decisions NOT to do something (while doing something about the same thing or very similar things when it comes to other parts of the population), at least at this point. The only distinction I'd make is between direct subsidies (the government forks over money) and indirect/implicit subsidies (the government decides not to make certain entities pay for certain things for which other entities have to pay the government).
- deleted 7y ago
  [deleted]
manfredo 7y ago
The point is, a subsidy is when one entity possesses resources (money, equipment, etc.) and grants those resources to another party without expectation of a positive return on investment. Some argument can be made that a tax break is a subsidy, but I've often seen that framing used to mislead people into thinking that their tax dollars are actually being spent on the recipient of the tax break (e.g. Amazon in NYC). Trying to put speculative and indirect costs predicted to happen decades in the future under the label of subsidies crosses the line into intellectual dishonesty. It's not hard to make good arguments for decarbonization of energy production, so using rhetoric with questionable intellectual honesty is often counterproductive. Here's my reply to your comment below, HN is probably limiting a shared IP: Your question is self-contradicting. "What if an entity doesn’t possess those resources, but gives them anyway" If an entity does not possess those resources, it cannot give them away. So the crux of the question is whether taking resources from another entity is a subsidy and the answer is no. When the Romans enslaved their neighbors and took their land, it'd be ridiculous to say that the Gauls, Carthaginians, etc. "subsidized" the Roman Republic and Empire. They did not help the Romans expand, in fact they resisted their expansion through force. Affecting climate through greenhouse gas emissions is much less direct than military conquest, but the dynamic is the same. Good arguments can be made by pointing out that emissions are harmful and degrade our ability to live in our environments, even though carbon free energy production is more expensive. The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce.
- mikeash 7y ago
  What if an entity doesn’t possess those resources, but gives them anyway by taking them from someone else because they’re powerful enough to do it, does that count?
- Qwertious 7y ago
  >The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce. Except they're not more expensive. The sheer economic damage that greenhouse emissions produceare just as inherent as if your groceries are delivered by a truck that regularly smashes through people's houses on the way. You can't say the truck delivery is "cheaper" than taking the road route, just because the government hasn't forced the truck driver to pay for the houses that were wrecked. I mean you can, but it's an accounting trick. It only exists on paper. You could say "it's not subsidy", but semantics aside, what is it called when the government makes something cheaper through its deliberate choice to charge less than normal (or none) for a certain group? In common parlance, if EVs get 50% off their registration fees, people say "the government subsidises EV registration fees", even if technically they're simply not charging the money in the first place. How is this different to fossil fuels? You could say that they reduced the fees from historical pricing, but then Australia had a carbon price that was abolished (for purely political reasons, FYI) - does that count as subsidising fossil fuels?

astine 7y ago

"Gifts in kind aren’t subsidies?" They can be but that's less common. The key difference is that a subsidy is direct and an active policy. For example, when people talk about subsidies for renewables, they aren't talking about any externalized costs of manufacture, which do exist, they are talking about direct government gifts and tax breaks deliberately put in place to encourage investment in renewables. When people talk about subsidies given to fossil fuels the same is true, especially when they are being compared to renewables as is the case in this discussion. Edit: removed word "decision" to clarify my meaning

dv_dt 7y ago
Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision. It's perhaps not a frequent point of policy discussion, but it's still a decision - particularly when we know the cost of climate crisis mitigation is so high.
- astine 7y ago
  "Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision." No, it's a passive policy decision by definition.
  - munk-a 7y ago
    Choosing not to make a choice is a choice itself - additionally this portion of policy has been heavily debated societally - it's not like we're talking about something so obscure that actually opening up a discussion on it will require a heavy expenditure of labour to properly research the topic.
  - rndgermandude 7y ago
    Why? What definition? The refusal to collect costs those polluters put on everybody is as active an decision as the decision not to collect taxes (tax breaks) that you'd otherwise use to keep the country running for everybody. It's an active policy decision to have the state stay passive and do nothing.
  - gnud 7y ago
    It's an active policy decision in any country where a proposed "polluter pays" type law has been voted down.
mikeash 7y ago
Why do subsidies have to be an active policy decision? You’re right, when people talk about fossil fuel subsidies, that’s thinking of government gifts and tax breaks. My point is that this is a deeply inadequate way to think about it. If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are.
- astine 7y ago
  "If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are." In the case of this discussion, you're looking at it backwards. The subject of fossil fuel subsidies was brought up in comparison to subsidies for renewables which in this case were already defined as specific government programs. If it weren't for that, I wouldn't be being such a stickler. However given that we are comparing renewables to fossil fuels we need to be sure that we are measuring the same thing and to include externalities when measuring fossil fuels and not when measuring renewables is to be not measuring the same thing. (I actually got confused when I first saw the IMF link so I know my concern isn't hypothetical.) Yes, I get that the case can be made that cost of using fossil fuels is more that the sum of direct gifts by the government to fossil fuel companies (fucking duh!) but that can be expressed without implying that governments gave $5.2T in tax dollars directly to fossil fuel companies in 2017. Where confusion is possible, it's best to make distinctions and clarify what is meant.
  - westurner 7y ago
    "subsidies" includes both direct and indirect subsidies. We can measure direct subsidies by measuring real and effective tax rates. We can measure indirect subsidies like healthcare costs paid by Medicare with subjective valuations of human life and rough estimates of the value of a person's health and contribution to growth in GDP, and future economic security. But who has the time for this when we're busy paying to help folks who require disaster relief services from the government and NGOs (neither of which are preventing further escalations in costs)
    - 7y ago
rndgermandude 7y ago
Then it's a gift in kind and a subsidy. When I litter, I get fined, but those companies are not when they litter e.g. carbon all over. When I dump chemicals into nature, I get fined for polluting the environment or even imprisoned outright, those companies do not e.g. when it's in the form of "emissions". Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions, while a lot of commercial vehicles and fuels for these vehikles get a reduced rate or even excluded from taxation. But cars here are taxed far less so than in other European countries. etc. The governments are clearly aware that pollution and dumping your garbage are things you should not do or at least minimize. They made laws against it, but actively decided to exclude certain business sectors and/or certain types of pollution, or actively decided not to regulate or tax certain types of pollution while regulating/taxing others.
- astine 7y ago
  "Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions" Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. Taxes and subsidies are often instituted in response to negative and positive externalities, but that doesn't change the fact that they are different things. This is important when trying to draw policy comparisons which is our situation here. You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing, and that's an entirely different discussion, but it doesn't mean that they are factually the same thing. There is a practical difference in terms of how things are measured and how policies are compared across industries and governments and that difference matters.
  - rndgermandude 7y ago
    >Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. The stated policy goal in part is to reduce emissions to met climate targets to fight climate change, so yes. >You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing It is. >but it doesn't mean that they are factually the same thing. First of all, the meaning of words and political concepts are never factual. But I'd still argue that at a high level they are the same, and both are subsidies. In both cases the government refuses money it would otherwise collect from different parties, thereby gifting those entities value you can put a price tag on. Those decisions are active decisions NOT to do something (while doing something about the same thing or very similar things when it comes to other parts of the population), at least at this point. The only distinction I'd make is between direct subsidies (the government forks over money) and indirect/implicit subsidies (the government decides not to make certain entities pay for certain things for which other entities have to pay the government).
deleted 7y ago
[deleted]

manfredo 7y ago

The point is, a subsidy is when one entity possesses resources (money, equipment, etc.) and grants those resources to another party without expectation of a positive return on investment. Some argument can be made that a tax break is a subsidy, but I've often seen that framing used to mislead people into thinking that their tax dollars are actually being spent on the recipient of the tax break (e.g. Amazon in NYC). Trying to put speculative and indirect costs predicted to happen decades in the future under the label of subsidies crosses the line into intellectual dishonesty. It's not hard to make good arguments for decarbonization of energy production, so using rhetoric with questionable intellectual honesty is often counterproductive. Here's my reply to your comment below, HN is probably limiting a shared IP: Your question is self-contradicting. "What if an entity doesn’t possess those resources, but gives them anyway" If an entity does not possess those resources, it cannot give them away. So the crux of the question is whether taking resources from another entity is a subsidy and the answer is no. When the Romans enslaved their neighbors and took their land, it'd be ridiculous to say that the Gauls, Carthaginians, etc. "subsidized" the Roman Republic and Empire. They did not help the Romans expand, in fact they resisted their expansion through force. Affecting climate through greenhouse gas emissions is much less direct than military conquest, but the dynamic is the same. Good arguments can be made by pointing out that emissions are harmful and degrade our ability to live in our environments, even though carbon free energy production is more expensive. The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce.

mikeash 7y ago
What if an entity doesn’t possess those resources, but gives them anyway by taking them from someone else because they’re powerful enough to do it, does that count?
Qwertious 7y ago
>The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce. Except they're not more expensive. The sheer economic damage that greenhouse emissions produceare just as inherent as if your groceries are delivered by a truck that regularly smashes through people's houses on the way. You can't say the truck delivery is "cheaper" than taking the road route, just because the government hasn't forced the truck driver to pay for the houses that were wrecked. I mean you can, but it's an accounting trick. It only exists on paper. You could say "it's not subsidy", but semantics aside, what is it called when the government makes something cheaper through its deliberate choice to charge less than normal (or none) for a certain group? In common parlance, if EVs get 50% off their registration fees, people say "the government subsidises EV registration fees", even if technically they're simply not charging the money in the first place. How is this different to fossil fuels? You could say that they reduced the fees from historical pricing, but then Australia had a carbon price that was abolished (for purely political reasons, FYI) - does that count as subsidising fossil fuels?