4 ms·

Yes, but note from the linked wikipedia article: "Oil, natural gas, and coal benefited most from percentage depletion allowances and other tax-based subsidies"

by however 11y ago

Yes, but note from the linked wikipedia article: "Oil, natural gas, and coal benefited most from percentage depletion allowances and other tax-based subsidies" It seems disingenuous to directly compare taxing someone less than you theoretically could have vs the "direct federal expenditures" on renewable energy. Also, "many of the 'subsidies' available to the oil and gas industries are general business opportunity credits, available to all US businesses"

mikeash 11y ago
That's more than made up for the fact that fossil fuels receive enormous subsidies in the form of being allowed to pollute without paying anything close to the costs generated by that pollution. If you actually charged the fossil fuel industry for their externalities, the subsidies listed here would fade into insignificance by comparison.
- however 11y ago
  I really feel like you're getting to the point though, where the word subsidy has no meaning. (via the wikipedia entry and the discussion here, it seem's that any time the government isn't taxing you 100% and seizing all your assets you are getting a "subsidy"). In that light, I'd like to see the numbers a different way. How about the difference in direct cash injections. I have no idea where to find it, but it might show a different story. Also, when it comes to externalities that are hard to measure, isn't there a good chance that the enormous increases in human quality of life due to abundant and relatively cheap access to energy are greater than the costs generated by pollution.
  - mikeash 11y ago
    I think it would be useful to have words that distinguish direct "government writes you a check" subsidies from the more subtle kind. But it's useful to discuss the more subtle kind too, and I don't know what else to call it. I don't think looking at direct cash injections is useful here, because they tell such a small part of the story. For an example, consider the case where the government takes your money and gives it to some company. That's an obvious subsidy. Now consider the case where the government doesn't take your money themselves, but rather declares that the company has the right to come into your house and help themselves to $AMOUNT. It's no longer explicit, but it's still pretty clearly a subsidy. Now let's say that they're in the business of disposing trash, and the government has declared that they can dump trash on your lawn for no compensation, when normally it would cost $AMOUNT. Ultimate effect is the same as above. Now let's say they're in some other business, that just happens to generate a lot of trash. The government declares that they can dump trash on your lawn for no compensation when normally it would cost $AMOUNT, making their other business much more cost effective. Again, it's ultimately the same as above. This last one is the fossil fuel situation. The government has decided that certain waste generated by burning fossil fuels can be disposed on other people's land, air, and water without compensation. The costs involved are enormous, but the users of fossil fuels don't pay. The end result is that fossil fuel prices are effectively subsidized by the population at large. I'm sure the enormous increase in the human quality of life has more than compensated for this damage. But that's not an argument for ignoring the externalities. If it's a net benefit then the total benefit will exceed the total cost including externalities. If the total benefit does not exceed that total cost then it's not a net benefit. It's especially important now when we're looking at transitioning to other sources of energy. If fossil fuels are only cheaper because of these externalities, then that means the net benefit to humanity is higher with alternatives.
  - tripzilch 11y ago
    > the enormous increases in human quality of life due to abundant and relatively cheap access to energy are greater than the costs generated by pollution. I dare you to write down that thought, seal the envelope and tell your children to open it in 40 years. Try this one weird trick; Future generations hate us!
tim333 11y ago
As a small investor in an oil company I'd be surprised if there was any net subsidy of the oil industry. If you tax a company $10 but then give back $2 in allowances you are not subsidising it by $2, you are taxing it $8. In the UK of what you pay at the pump for petrol about 60% goes in tax.

by however 11y ago

mikeash 11y ago

That's more than made up for the fact that fossil fuels receive enormous subsidies in the form of being allowed to pollute without paying anything close to the costs generated by that pollution. If you actually charged the fossil fuel industry for their externalities, the subsidies listed here would fade into insignificance by comparison.

however 11y ago
I really feel like you're getting to the point though, where the word subsidy has no meaning. (via the wikipedia entry and the discussion here, it seem's that any time the government isn't taxing you 100% and seizing all your assets you are getting a "subsidy"). In that light, I'd like to see the numbers a different way. How about the difference in direct cash injections. I have no idea where to find it, but it might show a different story. Also, when it comes to externalities that are hard to measure, isn't there a good chance that the enormous increases in human quality of life due to abundant and relatively cheap access to energy are greater than the costs generated by pollution.
- mikeash 11y ago
  I think it would be useful to have words that distinguish direct "government writes you a check" subsidies from the more subtle kind. But it's useful to discuss the more subtle kind too, and I don't know what else to call it. I don't think looking at direct cash injections is useful here, because they tell such a small part of the story. For an example, consider the case where the government takes your money and gives it to some company. That's an obvious subsidy. Now consider the case where the government doesn't take your money themselves, but rather declares that the company has the right to come into your house and help themselves to $AMOUNT. It's no longer explicit, but it's still pretty clearly a subsidy. Now let's say that they're in the business of disposing trash, and the government has declared that they can dump trash on your lawn for no compensation, when normally it would cost $AMOUNT. Ultimate effect is the same as above. Now let's say they're in some other business, that just happens to generate a lot of trash. The government declares that they can dump trash on your lawn for no compensation when normally it would cost $AMOUNT, making their other business much more cost effective. Again, it's ultimately the same as above. This last one is the fossil fuel situation. The government has decided that certain waste generated by burning fossil fuels can be disposed on other people's land, air, and water without compensation. The costs involved are enormous, but the users of fossil fuels don't pay. The end result is that fossil fuel prices are effectively subsidized by the population at large. I'm sure the enormous increase in the human quality of life has more than compensated for this damage. But that's not an argument for ignoring the externalities. If it's a net benefit then the total benefit will exceed the total cost including externalities. If the total benefit does not exceed that total cost then it's not a net benefit. It's especially important now when we're looking at transitioning to other sources of energy. If fossil fuels are only cheaper because of these externalities, then that means the net benefit to humanity is higher with alternatives.
- tripzilch 11y ago
  > the enormous increases in human quality of life due to abundant and relatively cheap access to energy are greater than the costs generated by pollution. I dare you to write down that thought, seal the envelope and tell your children to open it in 40 years. Try this one weird trick; Future generations hate us!

tim333 11y ago

As a small investor in an oil company I'd be surprised if there was any net subsidy of the oil industry. If you tax a company $10 but then give back $2 in allowances you are not subsidising it by $2, you are taxing it $8. In the UK of what you pay at the pump for petrol about 60% goes in tax.