"Conservatives have long argued against regulating fossil fuel production for the climate’s sake, claiming that doing so would interfere with the holy free market. A new study shows that’s a total fairy tale because the invisible hand isn’t responsible for dirty fuels’ market dominance—implicit government subsidies are. The findings show those subsidies total in the billions each year.
We often talk about the direct subsidies fossil fuel companies get from the government. Estimates range anywhere from $10 billion to $52 billion per year. But more insidious indirect subsidies also help keep fossil fuel companies in business, allowing companies to avoid paying the true price for their pollution and the other dangers they pose to society.
“We’re in a state of the world now where we have we call, in economics, inefficient pricing because the price that we pay for fossil fuels does not reflect all those costs,” Matthew Kotchen, an economist at Yale University and author of the study, said.
The paper, published in the Proceedings of the National Academy of Sciences on Monday, examines the value of implicit government support for U.S. coal, natural gas, gasoline, and diesel companies. In particular, it looks at the detrimental impacts those firms are able to offload onto society, specifically climate damages and public health effects from pollution. For gas and diesel, Kotchen also looked into the costs of car accident fatalities, congestion-based travel delays, and road damage from the use of heavy-duty vehicles that run on diesel. These are all what economists call externalities not priced into the use of fossil fuels. "
Dharna Noor reports for Earther March 22, 2021.
SEE ALSO:
"Biden Eyes Tax Hikes for Rich, Ending Fossil Fuel Subsidies to Fund Infrastructure" (Common Dreams)
"Seizing Opportunities For Fuel Subsidy Reform" (Brookings)
"Unpaid Environmental Damages From Fossil Fuels Are A $600B Annual Subsidy" (Ars Technica)
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