Gifts in kind aren’t subsidies? If the government gives equipment or resources or labor, rather than money, it’s no longer a subsidy? That sure doesn’t fit how I understand the term. What would you call those?

"Gifts in kind aren’t subsidies?"

They can be but that's less common. The key difference is that a subsidy is direct and an active policy.

For example, when people talk about subsidies for renewables, they aren't talking about any externalized costs of manufacture, which do exist, they are talking about direct government gifts and tax breaks deliberately put in place to encourage investment in renewables. When people talk about subsidies given to fossil fuels the same is true, especially when they are being compared to renewables as is the case in this discussion.

Edit: removed word "decision" to clarify my meaning

Then it's a gift in kind and a subsidy.

When I litter, I get fined, but those companies are not when they litter e.g. carbon all over. When I dump chemicals into nature, I get fined for polluting the environment or even imprisoned outright, those companies do not e.g. when it's in the form of "emissions". Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions, while a lot of commercial vehicles and fuels for these vehikles get a reduced rate or even excluded from taxation. But cars here are taxed far less so than in other European countries. etc.

The governments are clearly aware that pollution and dumping your garbage are things you should not do or at least minimize. They made laws against it, but actively decided to exclude certain business sectors and/or certain types of pollution, or actively decided not to regulate or tax certain types of pollution while regulating/taxing others.

"Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions"

Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. Taxes and subsidies are often instituted in response to negative and positive externalities, but that doesn't change the fact that they are different things. This is important when trying to draw policy comparisons which is our situation here.

You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing, and that's an entirely different discussion, but it doesn't mean that they are factually the same thing. There is a practical difference in terms of how things are measured and how policies are compared across industries and governments and that difference matters.

>Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point.

The stated policy goal in part is to reduce emissions to met climate targets to fight climate change, so yes.

>You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing

It is.

>but it doesn't mean that they are factually the same thing.

First of all, the meaning of words and political concepts are never factual.

But I'd still argue that at a high level they are the same, and both are subsidies. In both cases the government refuses money it would otherwise collect from different parties, thereby gifting those entities value you can put a price tag on.

Those decisions are active decisions NOT to do something (while doing something about the same thing or very similar things when it comes to other parts of the population), at least at this point.

The only distinction I'd make is between direct subsidies (the government forks over money) and indirect/implicit subsidies (the government decides not to make certain entities pay for certain things for which other entities have to pay the government).

">but it doesn't mean that they are factually the same thing.

First of all, the meaning of words and political concepts are never factual."

You're still missing the point. The point is that there is a distinction between a subsidy and an externality and that distinction is important. It's important for measurement reasons (The exact monetary amount a government spends on something is easier to measure than the indirect cost of a policy,) and for simple communication reasons. It makes no sense to talk about instituting a tax to cover a subsidy. You institute a tax to cover an externality. It also matters because there are ways of dealing with externalities other than taxes and subsidies and reducing the language makes this more confusing. It's especially confusing when the distinction is made in one discussion (about renewables) but not in the other (about fossil fuels.)

There is a term for using an unexpected definition for a word that already has a widely used definition during a discussion, that is a 'stipulative definition'. It's dishonest to do so without being clear upfront or in response to a discussion where the original definition is in use. This results in equivocation. Whether or not a subsidy is morally equivalent to an externality is a moot point if you're willing toss about with the language. My work involves financial reporting and if my employer asked for one set of numbers and I gave him another that I argued were 'morally equivalent' would pretty clearly be in the wrong, even if the point I was making about moral equivalence was correct.

No, you're splitting hairs.

There are direct and indirect subsidies. Indirect subsidies include externalities: external costs paid by everyone else (that the government should be incentivizing reductions in by requiring the folks causing them to pay)

Semantic digressions aside, they're earning while everyone else pays costs resultant from their operations (and from our apparent inability to allocate with e.g. long term security, health, and prosperity as primary objectives for the public sphere)

Handing money to polluters helps polluters, and failing to disincentivize externalities also helps polluters, but it's OK to call one thing a subsidy and the other thing poor governance.

"Subsidy" carries a connotation of purposeful action to help something. Subsidizing a bad thing is worse than merely allowing it to happen or looking the other way. It seems like you want to re-label things in "B" by the label for "A" to make it sound worse.

>"Subsidy" carries a connotation of purposeful action to help something.

Purpouseful action implies awareness and intention.

Externality implies not yet recognized.

Having 2 words for similar concepts does not mean they are different concepts. "heavy" and "massive" are two different words but they convey essentially the same thing.

I would agree that unrecognized externalities are not subsidies, say CO2 pollution before it was recognized, but then again since they were literally not recognized as externalities (yet).

But the very moment CO2 pollution is recognized, the previously unrecognized externality is to be instantly viewed as a subsidy.

History repeats itself, the first time as a tragedy, from then on as a farce.

For that logic to work we would need e.g. a carbon tax, such that there would be a straightforward monetary value associated with any exceptions that might be granted.

Why do subsidies have to be an active policy decision?

You’re right, when people talk about fossil fuel subsidies, that’s thinking of government gifts and tax breaks. My point is that this is a deeply inadequate way to think about it. If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are.

"If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are."

In the case of this discussion, you're looking at it backwards. The subject of fossil fuel subsidies was brought up in comparison to subsidies for renewables which in this case were already defined as specific government programs. If it weren't for that, I wouldn't be being such a stickler. However given that we are comparing renewables to fossil fuels we need to be sure that we are measuring the same thing and to include externalities when measuring fossil fuels and not when measuring renewables is to be not measuring the same thing. (I actually got confused when I first saw the IMF link so I know my concern isn't hypothetical.)

Yes, I get that the case can be made that cost of using fossil fuels is more that the sum of direct gifts by the government to fossil fuel companies (fucking duh!) but that can be expressed without implying that governments gave $5.2T in tax dollars directly to fossil fuel companies in 2017. Where confusion is possible, it's best to make distinctions and clarify what is meant.

"subsidies" includes both direct and indirect subsidies.

We can measure direct subsidies by measuring real and effective tax rates.

We can measure indirect subsidies like healthcare costs paid by Medicare with subjective valuations of human life and rough estimates of the value of a person's health and contribution to growth in GDP, and future economic security.

But who has the time for this when we're busy paying to help folks who require disaster relief services from the government and NGOs (neither of which are preventing further escalations in costs)

Problem is that if the word "subsidies" is used exclusively to mean a specific and narrow concept around cash transfers when talking about renewables, but then you use the term to include a much broader set of scenarios when talking about fossil fuels, while directly comparing the derived numbers, then you're misusing the language in order to deceive, regardless of all else. You're communicating that the numbers represent the same calculations for both forms of energy, when you know that they actually don't.

Define the terms however you like, as long as you are careful to not to induce people to believe someone that is untrue.

It’s true that you have to measure the same thing, but you also have to measure a useful thing.

If you compare fossil fuels and renewables based on the number of letters in their names, that’s the same thing for both, but it’s not useful.

Comparing explicit monetary subsidies is like that. If you want to include the implicit ones for renewables as well, you definitely should. But giving up and only comparing direct monetary subsidies gives you a woefully incomplete and misleading picture.

You're arguing that we should be comparing the total cost of the fossil fuel and renewable energy industries. If the discussion is mainly about the direction society should take with regard to energy, then I would agree with you. But there are still contexts in which it is useful to talk strictly about subsidies. For example, when discussing how much an industry depends on direct government action, which is the context of this whole discussion we are having right now. (ie Solar and Wind Power So Cheap They’re Outgrowing Subsidies, in which the my definition of subsidy is the one being used, I'm pretty sure.) Yes, there are time where it's more important to discuss the big picture, but there are also times it's worthwhile to discuss the details and language should retain the detail to do both.

There's another reason this is important and it is with regard to the big picture. A lot of people already know what subsidy means and understand it to mean direct government gifts. When you use a different definition of a commonly understood word, what you are doing is defining it stipulatively. If you don't clarify that you are using a stipulative definition ahead of time, then you are committing a fallacy of equivocation. It doesn't matter if you think that your stipulative definition makes more sense or is more useful, people have to be using words the same way in order to communicate. I'd rather not give climate denialists any more fuel than is absolutely necessary and confusing equivocations are unnecessary. Talking about subsidies when you mean subsidy and talking about costs when you mean cost helps avoid them.

Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision. It's perhaps not a frequent point of policy discussion, but it's still a decision - particularly when we know the cost of climate crisis mitigation is so high.

"Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision."

No, it's a passive policy decision by definition.

Why? What definition?

The refusal to collect costs those polluters put on everybody is as active an decision as the decision not to collect taxes (tax breaks) that you'd otherwise use to keep the country running for everybody.

It's an active policy decision to have the state stay passive and do nothing.

Choosing not to make a choice is a choice itself - additionally this portion of policy has been heavily debated societally - it's not like we're talking about something so obscure that actually opening up a discussion on it will require a heavy expenditure of labour to properly research the topic.

It's an active policy decision in any country where a proposed "polluter pays" type law has been voted down.

The point is, a subsidy is when one entity possesses resources (money, equipment, etc.) and grants those resources to another party without expectation of a positive return on investment. Some argument can be made that a tax break is a subsidy, but I've often seen that framing used to mislead people into thinking that their tax dollars are actually being spent on the recipient of the tax break (e.g. Amazon in NYC). Trying to put speculative and indirect costs predicted to happen decades in the future under the label of subsidies crosses the line into intellectual dishonesty.

It's not hard to make good arguments for decarbonization of energy production, so using rhetoric with questionable intellectual honesty is often counterproductive.

Here's my reply to your comment below, HN is probably limiting a shared IP:

Your question is self-contradicting. "What if an entity doesn’t possess those resources, but gives them anyway" If an entity does not possess those resources, it cannot give them away. So the crux of the question is whether taking resources from another entity is a subsidy and the answer is no. When the Romans enslaved their neighbors and took their land, it'd be ridiculous to say that the Gauls, Carthaginians, etc. "subsidized" the Roman Republic and Empire. They did not help the Romans expand, in fact they resisted their expansion through force. Affecting climate through greenhouse gas emissions is much less direct than military conquest, but the dynamic is the same.

Good arguments can be made by pointing out that emissions are harmful and degrade our ability to live in our environments, even though carbon free energy production is more expensive. The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce.

What if an entity doesn’t possess those resources, but gives them anyway by taking them from someone else because they’re powerful enough to do it, does that count?

>The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce.

Except they're not more expensive. The sheer economic damage that greenhouse emissions produceare just as inherent as if your groceries are delivered by a truck that regularly smashes through people's houses on the way.

You can't say the truck delivery is "cheaper" than taking the road route, just because the government hasn't forced the truck driver to pay for the houses that were wrecked. I mean you can, but it's an accounting trick. It only exists on paper.

You could say "it's not subsidy", but semantics aside, what is it called when the government makes something cheaper through its deliberate choice to charge less than normal (or none) for a certain group? In common parlance, if EVs get 50% off their registration fees, people say "the government subsidises EV registration fees", even if technically they're simply not charging the money in the first place. How is this different to fossil fuels? You could say that they reduced the fees from historical pricing, but then Australia had a carbon price that was abolished (for purely political reasons, FYI) - does that count as subsidising fossil fuels?

"subsidy" and "externalized cost" aren't mutually exclusive concepts (as you hint at in "...because subsidies aren't just externalized costs" [emphasis mine]), so your semantic argument rests on shaky foundations. an externalized cost can be considered a subsidy in many contexts, including legal/political ones.

like most words, "subsidy" may have a more specific meaning in a particular context, but understood differently in a general context. so taking a stance that one definition is better than another is relatively futile (in the sense that it convinces no one who's not already sympathetic).

so rather than relying on semantics, make the argument you're really trying to make, which, by context, seems to be that you don't think externalized costs should be used in the comparison.

"so rather than relying on semantics, make the argument you're really trying to make, which, by context, seems to be that you don't think externalized costs should be used in the comparison."

No, externalized costs are important to take into account when making policy decision. Obviously we should be worried about the costs of climate change.

The point I really want to make is that this is the wrong context in which to include externalities in the definition of subsidy because we are already implicitly using a definition of subsidy provided by the OP which excludes externalities.

i'm not sure how it's the wrong context, but no matter. my point was that the semantic argument is entirely beside the point.

the real question is whether we should consider the externalized costs of fossil fuels in policy decisions, and if so, when and how?

fossil fuels have favored status (not undeservedly) across the world. given what we know now about how it's extraction/use effects the world, including on us humans, should we continue to favor it over other energy sources?

in my estimation, fossil fuels have a useful place in our energy history (as an energy intermediary), but can only be a stepping stone to a more sustainable energy future that more directly harnesses energy from the sun (our ultimate energy source anyway). on the way, we should reduce the harmful impacts of fossil fuels as much as possible, without regard to the profits of oil magnates.

"i'm not sure how it's the wrong context, but no matter."

Actually, this is important. The original article talks about government subsidies in the renewable energy market. It's only talking about direct subsidies and tax breaks, not externalities. In response, someone posted an IMF report about subsidies in the fossil fuel market as a comparison. This report does include externalities. This means that we are not comparing apples to apples. It creates the impression that governments directly gave $5.2T to fossil fuel companies in 2017, which is not the case.

My broader point though, is that the distinction between an externality and a government policy meant to deal with that externality is a useful and important distinction to make. Some people on this thread seem to be arguing that because they see no moral distinction between the two (this is debatable but doesn't matter to my argument,) that there should be no semantic distinction, but I disagree, and strongly.

For one, these things are measured differently, and the government policy is usually set in terms of the externality. Subsidies and taxes directly impact a government's budget whereas externalities don't (at least not in the same way) which matters when doing public accounting. Subsidies and taxes are mandated by law whereas exxternalities exist as a result of economic activity. Externalities can also be addressed by means other than taxes or subsidies.

By way of analogy, consider the reverse. There are both positive and negative externalities. We sometimes subsidize industries in order to encourage positive externalities. For example, schooling is often publicaly funded in first world nations because having an educated populace is a positive externality. If an untaxed negative externality is the same as a subsidy then it stands to reason that an unsubsidised positive externality is a tax. If in improving the appearance of my home I improve the value of my neighborhood (a positive externality) did I just get taxed the value of my neighborhood's value increase and am I owed a subsidy as a result? I think that most people would answer 'no'.

There’s one more important point: if you include externalities in your subsidy calculation you shouldn’t only count negative externalities. Maybe there are none but taxes on fossil fuels usually end up being very regressive taxes on people with older cars who can’t afford to upgrade. Just as one example of a potential positive externality of cheap fossil fuels.

And a negative externality of education might be forcing older workers out of jobs. (Admittedly a stretch, but making this just for the sake of argument.)

The point is once you start including externalities in your subsidy calculations things get super fuzzy fast.

Collecting taxes on these externalities does not say what you use those taxes for. The true cost is the inefficiency from poor resource utilization, hand that money out based on say income and people will buy more efficient cars etc.

Net result lives saved from cleaner air without undo burdens on the poor.

sure, the studies may not be exactly comparable, and pointing that out is reasonable and even helpful. and yes, costs (including externalities) are not the same as the policies (e.g., direct subsidies) addressing them. but there is a relevant term in policy and economics for non-monetary benefits: "indirect subsidies", so again, your semantic argument is on shaky ground.

anyways, these are unimportant relative to the acute problem that burning fossil fuels kills people as well as other creatures great and small (not to mention other retaliations by our planet), especially considering that renewable alternatives are becoming economically attractive.

so let's price in those negative externalities (which on the flipside is reasonable to view as subsidies to the fossil fuel industry due to their market distorting effects) so that the invisible hand considers all costs in its march toward the optimal allocation of global resources.

You are correct, at the expense of conversation.

Or in another sense, the loss of conversation is a hidden subsidy toward his correctness!

They were making the argument that the headline shouldn't use an intentionally misleading word when there is a much better suited word that accurately and clearly conveys the meaning. Using a "technically correct" word isn't a defense when the vast majority of your target audience isn't going to properly understand the true meaning.

It's also not technically correct. Externalities are externalities because they don't effect price while subsidies inherently effect price.

Pretty sure if anyone should be using 'technically correct' terms from the field of economics, it should be the IMF.

> Any measure of the cost of climate change is to at least some degree speculation, whereas any attempt to measure the direct amount of money given to fossil fuel companies can probably be much more exact.

It's dishonest to differentiate these and just opens up the agents to game your definitions. Which they of course are doing.