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The true energy solution to climate change is free markets. Fossil fuels are subsidized[1] and their externalities are untaxed.[2] Our society is structured to

by ipnon 6y ago

The true energy solution to climate change is free markets. Fossil fuels are subsidized[1] and their externalities are untaxed.[2] Our society is structured to generate the suboptimal. This goes for pollution and price. [1] https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subs... [2] https://cleantechnica.com/2018/01/16/carbon-fees-mystery-untaxed-negative-externality/ https://cleantechnica.com/2018/01/16/carbon-fees-mystery-unt...

cbmuser 6y ago
Solar and wind are highly subsidized as well. Just look at German electricity prices.
- saagarjha 6y ago
  Keep in mind that the subsidy for oil might be "accounting for the entire world's economy collapsing in the future due to climate change".
- infecto 6y ago
  Agree with this and I would argue that subsidies can be a good thing. In a perfect world (which does not exist) I think subsidies for old power generation would have left long ago and as soon as new tech came out they could be applied to it.
- ClumsyPilot 6y ago
  obviously this varies country by country, and strongly depends on local climate.It's very poor argumentation in that sense. One should actually present numbers, not point fingers circumstantially.
headsupernova 6y ago
> free markets > externalities are untaxed. ?? Free markets are utterly and demonstrably unable to solve climate change.
- saagarjha 6y ago
  I believe the point was that fossil fuels operate in a market where they are subsidized, which is not really free.
  - monadic2 6y ago
    Yea well "really" free markets don't actually exist so that distinction seems a little silly. I mean obviously the subsidies are bad but removing them isn't going to solve much of anything by itself.
    - saagarjha 6y ago
      If you suddenly make using fossil fuels 10x more expensive people will switch off of them ASAP.
      - monadic2 6y ago
        > If you suddenly make using fossil fuels 10x more expensive people will switch off of them ASAP. Yea, this just isn't true. Rich people will just pay more for the same thing. Poor people will just have to pay more to even get to their jobs. It's pure laziness to put this on dogma rather than actually come up with decent policy to shape the market.
        saagarjha 6y ago
        Rich people have money, but they aren't stupid: why would they throw their money away on nonrenewable energy when they can just switch to something cheaper?
        monadic2 6y ago
        > Rich people have money, but they aren't stupid: why would they throw their money away on nonrenewable energy when they can just switch to something cheaper? What alternative is there to a private jet or a yacht? No, you have to get the fear of prison (or worse) in them to get them to act in a socially rational manner.
PaulDavisThe1st 6y ago
"taxing externalities" and many common definitions of "free markets" are incompatible. It might be wise to use more precise terminology if you want to combine these two concepts.
- enchiridion 6y ago
  I think the point GP is trying to make is that it already is not free, and it's not free in the wrong direction.
  - PaulDavisThe1st 6y ago
    The common definitions of "free markets" typically mean a lack of regulation of what can be sold and the a lack of regulation of the prices that things are sold at. The desired outcome (supposedly) is that the price is determined by the participants, based on their knowledge of the full cost of ownership and the perception of the benefits of ownership. But externalities have no inherent or obvious cost to market participants, either because they are so distributed that the cost per participant is ignorably small, or because the costs are distributed in time (and thus do not affect current market participants) (or both). The cost of externalities has to be determined and that inevitably involves questions about values. As a trivial example: how much do you (or should you) value clean air? What ppm contamination is worth a dollar to you every time you purchase fuel? This means that a "free market" with prices that include the cost of externalities must inevitably be regulated in some important sense, since the cost of externalities can only be established via the same processes used for regulation in general. And by most definitions of "free market", that is no longer a "free market". That doesn't mean this isn't the right thing to do. It just needs better terminology to describe it.
    - enchiridion 6y ago
      Thank you for clarifying the point. I agree. The externalities should be accounted for. Petroleum should be taxed and not subsidized.
    - sagarm 6y ago
choeger 6y ago
Two cents: Subsidies for fossile fuels do not make them cheap. They might make some local form competitive to the international market, but their inherent value comes from simple physics. Fossile fuels are simply much more effective than renewables. This does not mean that we cannot change it, but we need a compelling alternative. Slavery, for instance, was the most efficient means of agriculture for thousands of years. We changed it, somewhat ironically, by replacing it with mechanisation, driven by fossile fuels. Externalities are extremely hard to give a fair price. We could have a limited CO2 Budget, but that limit would be artificial. Think of a CO2 Credit currency: Who would not be tempted to increase the limit ever so slightly to generate the credits for a new school/hospital/anti-terror-drone? So, no, I do not think markets offer a solution here. They could help, of course, but the real solution is the introduction of effectively free energy with massive-scale photovoltaics. One barrel Crude oil has an energy of around 1.8MWh and costs between $20 and $70 to produce. Thus, to overcome oil, one needs to get the price per kWh solar down between four and one dollar cent. We are about to reach that point rather soon. From there on it is game over for big oil.
- rsynnott 6y ago
  > Slavery, for instance, was the most efficient means of agriculture for thousands of years. We changed it, somewhat ironically, by replacing it with mechanisation, driven by fossile fuels. Eh? Almost nowhere transitioned directly from slavery to mechanisation. Not serfdom, even. Heavy mechanisation of agriculture was a 20th century thing.
  - choeger 6y ago
    Right. But before that mechanisation, slavery still would have been the most efficient means of production.
    - TT3351 6y ago
      Why do you think this? It adds additional, real costs ranging from the need to finance extensive population controls (with the ensuing social unrest) and an unreliable workforce prone to running away.

by ipnon 6y ago

cbmuser 6y ago

Solar and wind are highly subsidized as well. Just look at German electricity prices.

saagarjha 6y ago
Keep in mind that the subsidy for oil might be "accounting for the entire world's economy collapsing in the future due to climate change".
infecto 6y ago
Agree with this and I would argue that subsidies can be a good thing. In a perfect world (which does not exist) I think subsidies for old power generation would have left long ago and as soon as new tech came out they could be applied to it.
ClumsyPilot 6y ago
obviously this varies country by country, and strongly depends on local climate.It's very poor argumentation in that sense. One should actually present numbers, not point fingers circumstantially.

headsupernova 6y ago

> free markets > externalities are untaxed. ?? Free markets are utterly and demonstrably unable to solve climate change.

saagarjha 6y ago
I believe the point was that fossil fuels operate in a market where they are subsidized, which is not really free.
- monadic2 6y ago
  Yea well "really" free markets don't actually exist so that distinction seems a little silly. I mean obviously the subsidies are bad but removing them isn't going to solve much of anything by itself.
  - saagarjha 6y ago
    If you suddenly make using fossil fuels 10x more expensive people will switch off of them ASAP.
    - monadic2 6y ago
      > If you suddenly make using fossil fuels 10x more expensive people will switch off of them ASAP. Yea, this just isn't true. Rich people will just pay more for the same thing. Poor people will just have to pay more to even get to their jobs. It's pure laziness to put this on dogma rather than actually come up with decent policy to shape the market.
      - saagarjha 6y ago
        Rich people have money, but they aren't stupid: why would they throw their money away on nonrenewable energy when they can just switch to something cheaper?
        monadic2 6y ago
        > Rich people have money, but they aren't stupid: why would they throw their money away on nonrenewable energy when they can just switch to something cheaper? What alternative is there to a private jet or a yacht? No, you have to get the fear of prison (or worse) in them to get them to act in a socially rational manner.

PaulDavisThe1st 6y ago

"taxing externalities" and many common definitions of "free markets" are incompatible. It might be wise to use more precise terminology if you want to combine these two concepts.

enchiridion 6y ago
I think the point GP is trying to make is that it already is not free, and it's not free in the wrong direction.
- PaulDavisThe1st 6y ago
  The common definitions of "free markets" typically mean a lack of regulation of what can be sold and the a lack of regulation of the prices that things are sold at. The desired outcome (supposedly) is that the price is determined by the participants, based on their knowledge of the full cost of ownership and the perception of the benefits of ownership. But externalities have no inherent or obvious cost to market participants, either because they are so distributed that the cost per participant is ignorably small, or because the costs are distributed in time (and thus do not affect current market participants) (or both). The cost of externalities has to be determined and that inevitably involves questions about values. As a trivial example: how much do you (or should you) value clean air? What ppm contamination is worth a dollar to you every time you purchase fuel? This means that a "free market" with prices that include the cost of externalities must inevitably be regulated in some important sense, since the cost of externalities can only be established via the same processes used for regulation in general. And by most definitions of "free market", that is no longer a "free market". That doesn't mean this isn't the right thing to do. It just needs better terminology to describe it.
  - enchiridion 6y ago
    Thank you for clarifying the point. I agree. The externalities should be accounted for. Petroleum should be taxed and not subsidized.
  - sagarm 6y ago

choeger 6y ago

Two cents: Subsidies for fossile fuels do not make them cheap. They might make some local form competitive to the international market, but their inherent value comes from simple physics. Fossile fuels are simply much more effective than renewables. This does not mean that we cannot change it, but we need a compelling alternative. Slavery, for instance, was the most efficient means of agriculture for thousands of years. We changed it, somewhat ironically, by replacing it with mechanisation, driven by fossile fuels. Externalities are extremely hard to give a fair price. We could have a limited CO2 Budget, but that limit would be artificial. Think of a CO2 Credit currency: Who would not be tempted to increase the limit ever so slightly to generate the credits for a new school/hospital/anti-terror-drone? So, no, I do not think markets offer a solution here. They could help, of course, but the real solution is the introduction of effectively free energy with massive-scale photovoltaics. One barrel Crude oil has an energy of around 1.8MWh and costs between $20 and $70 to produce. Thus, to overcome oil, one needs to get the price per kWh solar down between four and one dollar cent. We are about to reach that point rather soon. From there on it is game over for big oil.

rsynnott 6y ago
> Slavery, for instance, was the most efficient means of agriculture for thousands of years. We changed it, somewhat ironically, by replacing it with mechanisation, driven by fossile fuels. Eh? Almost nowhere transitioned directly from slavery to mechanisation. Not serfdom, even. Heavy mechanisation of agriculture was a 20th century thing.
- choeger 6y ago
  Right. But before that mechanisation, slavery still would have been the most efficient means of production.
  - TT3351 6y ago
    Why do you think this? It adds additional, real costs ranging from the need to finance extensive population controls (with the ensuing social unrest) and an unreliable workforce prone to running away.