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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
by 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 agoSubsidy 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.