At least some of that was, in fact, hard cash subsidies.

The US spends around $35 billion/year in actual subsidies on fossil fuels.[1] (About $20 billion to producers, and about $15 billion to consumers.

Further more, the cost of not charging the fossil fuel industry for carbon emissions should absolutely be counted as a real subsidy, although its value is harder to calculate. But we force industries to clean up other pollutants, or we otherwise regulate their environmental impact, which costs them. If we gave one industry a pass on those regulations, that would be uncontroversially a subsidy.

1. https://www.theguardian.com/environment/climate-consensus-97...

But since any activity changes the environment for the worse, by that logic everything is subsidised. We can't use language that way - words become meaningless. Logically it goes straight to a silly place where everyone is getting 'welfare' because the government isn't taxing them for breathing out CO2.

A subsidy is the government forcing more resources to be allocated to something than people with money think is good. An externality is when we believe that outcomes are affecting people who weren't the buyer/seller.

The environmental lobby wants to claim that fossil fuels are subsidised therefore we must stamp them out because it is Free Market. Charitably speaking, that really just shows the environmentalists are making an effort to use other people's language but don't understand the free market philosophy at a fundamental level. If the use of something has to stop for environmental reasons then it is taxed. Claiming that it is really reversing a subsidy comes out more as trying to shout the opposition down by changing what words mean on them. It is bad form.

> A subsidy is the government forcing more resources to be allocated to something than people with money think is good. An externality is when we believe that outcomes are affecting people who weren't the buyer/seller.

In common speech "subsidize" is frequently used in the context of people being made to involuntarily bear externalities.

For example, people who live in areas with a lot of truck traffic often complain that they are being forced to "subsidize" trucking due to the damage to their local roads. What they mean is that they are being forced to bear the externality of excessive road damage, not that they are literally writing a check to the trucking company.

They are specificly using that word to get the same errendous implication. They aren't subsidizing trucking, but saying they are instead of 'our roads get worn faster' makes it easier to lobby for changes or money to improve the road.

I.e. You are demonstrating the exact same error but don't seem to understand what's going on with the use of the word.

But it is the use of the word that gives it its meaning and the meanings of words change.

There is value in clarifying what is meant be a specific usage of 'subsidy', (which the linked paper does in the first sentence of its summary). There is value to calling people out for not doing this clarification when they use the word in its less standard meaning.

However, there is no value in saying that a fairly widespread usage of the word "subsidy" is incorrect.

It's like trying to pretend that "literally" doesn't figuratively have the same meaning as "figuratively". That boat has sailed and all we can do now is distinguish be between literal and figurative uses of "literally".

That is an excellent analogy, but in this case it is like going from 'the joke is so funny its literally killing me' (as in I'm laughing too hard) to prosecuting the joke-teller for murder. Or possibly if a clown kills someone not prosecuting that clown because "obviously that clown is literally killing someone but literally doesn't mean literally".

There are a range of actions that are appropriate to take when dealing with an unwanted subsidy. If we redefine what 'subsidy' means then the range of appropriate actions changes and we have to talk about what the new actions are. It would be far easier to use the right word, so word and action line up without the need for analogies.

> If we redefine what 'subsidy' means then the range of appropriate actions changes and we have to talk about what the new actions are. It would be far easier to use the right word, so word and action line up without the need for analogies.

I can't figure out what you are trying to say. Can you give a concrete example? What is the confusion that is added by the term 'implicit subsidies'?

> They aren't subsidizing trucking, but saying they are instead of 'our roads get worn faster' makes it easier to lobby for changes or money to improve the road.

That money they are lobbying for comes from their taxes, especially if it's local roads, so yes, if the trucking company isn't paying for the damage, the taxpayer is indirectly subsidizing them.

By that logic, everything tax revenue is spent on is a subsidy for someone. It makes the definition so broad as to be useless.

Not all unaccounted externalities (if you prefer that term) are of the same magnitude, though. It's the magnitude relative to others that matters.

If say 10% of a city's budget goes to fixing truck damage to roads without at least commensurate benefit, then it's a more important issue than whether .05% went to cleaning up cotton candy after the town fair.

It also doesn't even have to be about tax expenditure. The healthcare cost of using fossil fuels is realized in private spending on treatment for pollution triggered respiratory illnesses, and the economic cost of climate change effect mitigation, which is already being accounted for in business planning.

Yes. But there is a reason we don't call that a subsidy. That's the entire point of the comment thread.

That like saying that the porn industry is being subsidized for the costs of divorce

Not really, because in your example the consumer has a choice whether or not to consume the product. Not that there is no externality - all activities have externalities - but the scales are completely different than with electricity production, and scale is what makes the case of fossil fuels different.

Electricity is considered a human right - it is required maintain the most basic modern standard of living - and the externalities of it's production with fossil fuels are borne by everyone in some way. Therefore it's a matter of massively broader consequence and greater cost than the example you used.

Some of it is heating subsidies for the poor, which gives a misleading impression, unless we're planning for the poor to freeze once we've transitioned to renewables; the subsidy will simply transfer across.

The existing subsidies are often specific to fossil fuels (heating oil and natural gas). You don't get them for installing electric heat pumps.

The better alternative would be to provide the subsidy in cash and let the poor decide what they need for themselves, instead of trying to choose for them between heating oil vs. investing in heat pumps vs. better insulation vs. turning down the thermostat and using the money for something else they need more.

You give them the money, and they'll spend it on blackjack and hookers. Regardless of whether you give them subsidy money, you have to charge higher prices for energy if you want any hope of reducing fossil fuel use.

> You give them the money, and they'll spend it on blackjack and hookers.

Stuff is fungible. If you give someone money for heating oil then they'll spend it on heating oil and use the money they would have spent on heating oil for blackjack and hookers if they want to. The only thing you're really doing is forcing them to buy heating oil instead of actual substitutes for burning more heating oil, like heat pumps or better insulation. Because one way or another they need to heat their living space, but if you satisfy that requirement for them in a specific way, it still frees up resources that they would have had to use for that and can now use for unrelated things like blackjack and hookers.

I would say that's an administrative issue that's a bit tangential.

Carbon tax + per head tax credit. Big consumers (the rich) end up paying, small consumers (the poor) end up with cash in their pocket, the government has no extra revenue that could lead to perverse incentives.

That doesn't fix the problem.

Buying oil is already expensive, yet we buy too much of it.

It has to be expensive enough to depress consumption and/or promote more efficient use. Countries where oil is expensive have better fuel efficiency, for example.

Doubling the price doesn't help much (inelastic). Look at countries with huge petrol taxes and they still use heaps: https://www.globalpetrolprices.com/gasoline_prices/

I'm in New Zealand, and plenty of us have serious gas guzzlers even though petrol is far more expensive than in the US. A bunch of Scandinavian countries are twice as expensive as the US.

Accounting isn't just lying with numbers. Those are real costs whether they're paid for in cash or otherwise. They may be hard to estimate, but they're real costs.

For example, if you build roads and don't charge users to use them, they are going to use those roads more than if you charged users the costs that they incur for construction and maintenance. Building roads but not charging for their use is a subsidy to vehicle use, which is also a subsidy to all of the inputs of vehicle use, including mining, manufacturing, and yes, fossil fuel consumption.

The same goes for environmental costs. You either pay for them with cash or you pay for them with a destroyed environment. And even with a destroyed environment, you're probably still paying in cash, just indirectly, deferred substantially, and with significant interest.

If the society knowingly pays the difference between market price and actual price, that effectively is a subsidy.

Edit: That money is actually spent, though indirectly through health care etc.

Which is to say, it’s a subsidy that we pay with people’s health and people’s lives.