Sentences to ponder

A report from Harvard's Kennedy Center last year found that the world could cut global CO2 emissions by about 6 percent simply by scrapping price supports for fossil energy.

Hat tips go to Sullivan and Plumer.


How much would they rise if we eliminated carbon taxes?

Surely this is a no-brainer.

If there's anything we can all hold hands and agree on it has to be that distortionary government subsidies for coal are bad policy.

The industrialized world does not have price supports for fossil energy. The industrialized world only ever taxes energy, although quite a bit escapes taxation. Only poor countries subsidize energy. How does anyone suggest we get them to stop?

The subsidies the Kennedy Centre report is talking about are identified in this Inetrnational Energy Authority report (sorry, I found the slides only).

Last page is best one. We are indeed talking about consumption subsidies in oil producing nations mostly. Iran, for example, is over $100 billion of the $550 billion total.

None of the big industrialised nations are even mentioned: don't subsidise enough to even make the chart.

Where's Bill?

If this were Facebook, I would :like: this.

It would have helped if you had added that these are subsidies in the producing and developing countries. This has nothing to do with US, Europe or other industrialized nations.

They are pointing out that producing nations subsidize fuel use massively. Iran, Russia, and Saudi Arabia have massive subsidies through low local fuel prices. Changing this is politically difficult. Mexico and Indonesia have both greatly reduced (but not yet eliminated) their price subsidies. It caused major internal disruption.

They also point out that foreign aid and internal aid for the very poor is often in the form of fuel price subsidies. Switching to other forms of aid is hard, and this paper is arguing for the need to do that. One example of the difficulty is the subsidy for cooking gas in the extremely poor in the slums of Africa and India. You are dealing with people trying to live on $200/yr. Suggestions like using improved stoves is hard on people who are living on the streets. The aid changes are possible, but it's not as simple as "stop the subsidy". It calls for local insight into how humanitarian aid can be provided in a more constructive manner.

How much could we gain by scrapping all the breeding?

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