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A small niggle: I think the author misses the point on carbon tax. Not having a carbon tax literally acts as subsidy. It is not a metaphor. In polluting, you ar

A small niggle: I think the author misses the point on carbon tax. Not having a carbon tax literally acts as subsidy. It is not a metaphor. In polluting, you are exploiting a resource you do not own, and not paying for that exploitation is quite literally a subsidy under a just and fair economic system. It is an intervention from the baseline of a properly functioning market (one that stops people selling things they do not own). They also seem confused, each country should pay roughly for its own global emissions impact. The coordination problem is that if one country pays but the others don't, then the paying country's industry might be outcompeted by other counties industries (who don't pay this just tax).

gipp 2y ago
Those are both explicitly arguments that the author made in the article, how is he missing the point? He didn't say the lack of carbon tax acts doesn't act as a subsidy. He agreed that it does. His point was failing to distinguish between that lack, versus literal direct payments from a government budget to fossil fuel projects, is confusing and misleading. Which is true, because while both are effectively subsidies, the incentives and challenges in addressing them are wildly different.
- LeroyRaz 2y ago
  Subsidy does not solely refer to direct payment. It can also refer to not taxing certain goods. By that standard definition, it is literally a subsidy to not tax carbon (as in a just market it would be taxed). Quoting Wikipedia "Subsidies take various forms— such as direct government expenditures, tax incentives, soft loans, price support, and government provision of goods and services." I think the author has a narrower definition of what subsidy means. They seem to think direct payment is a subsidy and other forms are "effective" subsidies. But this is a false distinction, and the fact that they project that narrow definition onto a standard economic term, does not make the initial communication false, which by the way, is from the international monitary fund, and likely directed towards an audience of the economically literate. In such a context, using the word subsidy is far from misleading.
rawgabbit 2y ago
I believe the author's point is that twisting definitions to mean something the majority do not expect, hurts credibility. In other words, adopting unusual meaning of words like "subsidy means they are not imposing a carbon tax" makes people less trusting of you.
- mrandish 2y ago
  Yes, this. I didn't know this before reading TFA. It's really bad to redefine common word usage like this.
  - LeroyRaz 2y ago
    It's not redefining the word. It literally is a subsidy to not tax carbon, according to core mainstream accepted economic principles. Whether you agree or disagree with carbon taxes, it is simply true that not having them is a subsidy.
- LeroyRaz 2y ago
  But the international monitary fund is talking to economists who will understand how not having a carbon tax meets the definition of being a subsidy. There is no misuse or twisting of definition. It is an economic term being accurately used in communication with an audience of the economically literate.
  - fwn 2y ago
    Economists know this definition, yes. But, as the parent hints, this is separate from the phenomenon that the use of epistemic language that does not match the common use of a term undermines legitimacy/trust in the institution. > There is no misuse or twisting of definition. The denial of such perceptions in the general population will presumably have little influence on the perceptions of the general population. At worst, it will merely lead to further polarisation. I can fully understand the desire to defend the definitions of one's own discipline, but it doesn't help with the question of how third parties perceive it. We need to remember that outside the epistemic community of economists, giving something to someone (a subsidy) is not the same as not taking something from someone (not taxing) - and I'd guess that no amount of academic writing or passionate insisting is going to change that in the near future.

gipp 2y ago

Those are both explicitly arguments that the author made in the article, how is he missing the point? He didn't say the lack of carbon tax acts doesn't act as a subsidy. He agreed that it does. His point was failing to distinguish between that lack, versus literal direct payments from a government budget to fossil fuel projects, is confusing and misleading. Which is true, because while both are effectively subsidies, the incentives and challenges in addressing them are wildly different.

LeroyRaz 2y ago
Subsidy does not solely refer to direct payment. It can also refer to not taxing certain goods. By that standard definition, it is literally a subsidy to not tax carbon (as in a just market it would be taxed). Quoting Wikipedia "Subsidies take various forms— such as direct government expenditures, tax incentives, soft loans, price support, and government provision of goods and services." I think the author has a narrower definition of what subsidy means. They seem to think direct payment is a subsidy and other forms are "effective" subsidies. But this is a false distinction, and the fact that they project that narrow definition onto a standard economic term, does not make the initial communication false, which by the way, is from the international monitary fund, and likely directed towards an audience of the economically literate. In such a context, using the word subsidy is far from misleading.

rawgabbit 2y ago

I believe the author's point is that twisting definitions to mean something the majority do not expect, hurts credibility. In other words, adopting unusual meaning of words like "subsidy means they are not imposing a carbon tax" makes people less trusting of you.

mrandish 2y ago
Yes, this. I didn't know this before reading TFA. It's really bad to redefine common word usage like this.
- LeroyRaz 2y ago
  It's not redefining the word. It literally is a subsidy to not tax carbon, according to core mainstream accepted economic principles. Whether you agree or disagree with carbon taxes, it is simply true that not having them is a subsidy.
LeroyRaz 2y ago
But the international monitary fund is talking to economists who will understand how not having a carbon tax meets the definition of being a subsidy. There is no misuse or twisting of definition. It is an economic term being accurately used in communication with an audience of the economically literate.
- fwn 2y ago
  Economists know this definition, yes. But, as the parent hints, this is separate from the phenomenon that the use of epistemic language that does not match the common use of a term undermines legitimacy/trust in the institution. > There is no misuse or twisting of definition. The denial of such perceptions in the general population will presumably have little influence on the perceptions of the general population. At worst, it will merely lead to further polarisation. I can fully understand the desire to defend the definitions of one's own discipline, but it doesn't help with the question of how third parties perceive it. We need to remember that outside the epistemic community of economists, giving something to someone (a subsidy) is not the same as not taking something from someone (not taxing) - and I'd guess that no amount of academic writing or passionate insisting is going to change that in the near future.