Philosophy Discussion Forums

GE Morton wrote: ↑November 21st, 2021, 4:07 pmBlah blah

Mate, I addressed all of these but you like to pretend I didn't. Why? Because you are like one of those old people who bails people up and babbles endlessly without listening, and make it difficult for their "victims" to escape.

This is the same strategy you used in the "What could make morality objective?" thread, which you spun out to 130 PAGES (!!!!) trying to convince everyone that your idea of morality is objective while everyone else's was subjective.

Now you try to draw people into the idea that corporations are without fault in their exploitation and manipulation of the masses, because they are merely looking after their interests. You argue for this blatant misunderstanding of the situation even after Fox and co helped Trump to incite an attempted insurrection at the Capitol.

You interpret my pointing out unethical corporate behaviour as antipathy. I would have simply left that single short observation, noting corporate misbehaviour and not worried further, but you wanted to make it an issue. It's not even the topic of the thread. It's basic and can be reduced to a single irrefutable sentence:

For decades, fossil fuel companies have interfered with societies' ability to adapt to climate change, and this malfeasance should be taken into account when considering the massive subsidies and other benefits still being provided to the fossil fuel industry.

https://cen.acs.org/articles/89/i51/Lon ... idies.html

Using government documents, academic papers, and a mix of other data and reports, Pfund and Healey offer a historical perspective on today’s debate over energy subsidies. Their study finds a paucity of government support for renewable energy sources compared with past government investment in coal, gas, oil, or nuclear energy sources, which helped the country transition to new energy technologies and infrastructures.

... Pfund and Healey favor government investments in energy, and their research supports the view that over the years new transitional energy sources have spurred U.S. economic growth and innovation. But their study, “What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future,” also finds that federal support of renewable energy falls short of the aid the federal government has given to oil, gas, coal, and nuclear energy when they were new. In fact, they say, backing for renewable energy is trivial in size.

https://australiainstitute.org.au/post/ ... n-2020-21/

Australian fossil fuel subsidies hit $10.3 billion in 2020-21

Fossil fuel subsidies cost Australians a staggering $10.3 billion in FY 2020-21 with one Commonwealth tax break alone ($7.84 billion) exceeding the $7.82 billion spent on the Australian Army, according to research released today by The Australia Institute.

In fact, $10.3 billion in Government subsidies means that in 2020, every minute of every day $19,686 was effectively given to coal, oil and gas companies and major users of fossil fuels.

By contrast renewable energy subsidies amount to less than $3, and EIGHTY-TWO PERCENT of that goes to "Clean Coal Technology".

https://www.nature.com/articles/d41586-021-02847-2

Why fossil fuel subsidies are so hard to kill

Fossil-fuel subsidies are one of the biggest financial barriers hampering the world’s shift to renewable energy sources. Each year, governments around the world pour around half a trillion dollars [this may be overstated but it depends on the definition of subsidy - but the amount is still huge] into artificially lowering the price of fossil fuels — more than triple what renewables receive. This is despite repeated pledges by politicians to end this kind of support, including statements from the G7 and G20 groups of nations.

“I think everyone seems to be basically on the same page that something needs to be done about fossil-fuel subsidies,” says Harro van Asselt, a specialist in climate law and policy at the University of Eastern Finland in Joensuu. “It’s the discrepancy between the rhetoric and the reality that is starting to bite a little bit. We’re figuring out that it’s incredibly challenging to actually make it happen.”

... Fossil-fuel subsidies generally take two forms. Production subsidies are tax breaks or direct payments that reduce the cost of producing coal, oil or gas. These are common in Western countries and are often influential in locking in infrastructure such as oil pipelines and gas fields, says Bronwen Tucker, an analyst in Edmonton, Canada, at Oil Change International, a non-profit research organization headquartered in Washington DC that works to reveal the costs of fossil fuels.

Consumption subsidies, meanwhile, cut fuel prices for the end user, such as by fixing the price at the petrol pump so that it is less than the market rate. These are more common in lower-income countries — in some, they help people to get clean cooking fuel they couldn’t otherwise afford. In others, such as the Middle East, the subsidies are sometimes regarded as helping citizens to benefit from a country’s endowment of natural resources, says Michael Taylor, an energy analyst in Bonn, Germany, who works at the International Renewable Energy Agency (IRENA), headquartered in Abu Dhabi.

https://www.cnbc.com/2021/10/29/world-s ... ls-un.html

World spends $423 billion a year to subsidize fossil fuels, UN research says

Steiner said that spending $423 billion a year on fossil fuel subsidies is not an effective use of taxpayers’ money. He added that they are often justified to ensure energy is cheaper for poorer people.

“But actually, when you look at the statistics the interesting reality is that it is something that actually benefits, really, the wealthier parts of society because they are disproportionately larger users of energy,” Steiner said.

“So, if you’re interested in helping poorer people to have access to energy, to fuel, there are much more efficient ways of doing that and you don’t need to distort an entire economy in terms of the way we currently make fossil fuels artificially cheaper to use,” he said.

The IMF has a higher figure again: https://www.imf.org/en/Publications/WP/ ... ates-46509

This paper updates estimates of fossil fuel subsidies, defined as fuel consumption times the gap between existing and efficient prices (i.e., prices warranted by supply costs, environmental costs, and revenue considerations), for 191 countries. Globally, subsidies remained large at $4.7 trillion (6.3 percent of global GDP) in 2015 and are projected at $5.2 trillion (6.5 percent of GDP) in 2017. The largest subsidizers in 2015 were China ($1.4 trillion), United States ($649 billion), Russia ($551 billion), European Union ($289 billion), and India ($209 billion).

You can try to obfuscate by pointing out the varying estimates of fossil fuel company subsidies. Whatever, the amount is huge - and inappropriate, given the seriousness of climate change and fossil fuel companies' repeated failure to future-proof themselves beyond lobbying and rent seeking.

We should not be propping up these inefficient companies with taxpayer largesse. There was a case for temporary assistance to allow for re-adjustment, but since those subsidies were simply funnelled into profit, it should be a matter of turning off the tap. However, the companies can hold societies to ransom by threatening blackouts.

Putting more dollars into renewable energy would allow for proper competition (strange that a libertarian like you favours uneven subsidies that prevent meaningful competition) that would benefit citizens and state.

GE Morton wrote: ↑November 21st, 2021, 4:07 pm ...you've studiously ignored every argument I've made.

When someone responds to one of your arguments, you just restate it. You don't address their questions, but simply repeat your own dogma. That's the difficulty Sy Borg is referring to, I think.

Pattern-chaser wrote: ↑November 22nd, 2021, 7:55 am

GE Morton wrote: ↑November 21st, 2021, 4:07 pm ...you've studiously ignored every argument I've made.

When someone responds to one of your arguments, you just restate it. You don't address their questions, but simply repeat your own dogma. That's the difficulty Sy Borg is referring to, I think.

Well, I don't think I've done that, but perhaps I have. Can you cite an example?

In fact, I always address the question or claim made, by citing it and specifically answering it. Some examples I mentioned a few posts back, with respect to some of Sy's claims (the "you" in each example refers to Sy):

* You claimed that fossil fuel companies receive lavish "subsidies." I provided evidence that all these "subsidies" were not subsidies at all, but tax deductions similar or identical to those available to all businesses. You didn't respond. I even gave you the definition of "subsidy," which you ignored, and continued to mis-use the term.

* You said, "It's fairly clear that his assumption about monopolies naturally being broken down by the free market was wrong."

I gave you a slew of examples of large (near) monopolies broken up, not by government decree, but by market forces. No response.

* You claimed that fossil fuel companies "controlled" the media and "cynically manipulate public opinion." I pointed out that climate change alarmists get far more media "face-time" than fossil fuel companies, and that far fewer people could tell you what was Exxon's position on that issue than what is Al Gore's or Oprah Winfrey's position. No response.

You (Pattern-Chaser) recently argued that no one is qualified to decide who is eligible to vote. I gave some examples of cases where we routinely make those decision. That wasn't a specific response to your claim?

Sy Borg wrote: ↑November 21st, 2021, 8:24 pm
We should not be propping up these inefficient companies with taxpayer largesse. There was a case for temporary assistance to allow for re-adjustment, but since those subsidies were simply funnelled into profit, it should be a matter of turning off the tap.

Sy . . . I've agreed that governments ought not be subsidizing energy companies. But I've also argued that most of what you're counting as "subsidies" --- various tax deductions and environmental impacts --- are not subsidies per the common definition of that word. The tax deductions are for various business costs, and in general, all business costs are tax-deductible, for all businesses. And the environmental costs are properly chargeable, not to the producers of those fuels, but to their users.

But you ignore those arguments and continue to repeat the same "subsidy" claims you made earlier.

You also condemn those companies for "manipulating public opinion," though there is no evidence their views had any appreciable impact on public opinion, and plenty of evidence that climate doomsayers, such as Al Gore, Oprah Winfrey, and many others, have had far more impact.

But you've become emotionally convinced that fossil fuel producers are the "evil demons" behind climate change, and must be exorcised. That allows you to evade responsibility for your own contributions to that problem.

However, the companies can hold societies to ransom by threatening blackouts.

Oh, not likely. If their tax deductions are repealed, all that will happen is that the prices you pay for electricity, heating and transportation will increase substantially.

This question of how to define a subsidy is quite interesting. I looked at the WTO definition and one of its definitions of a subsidy (ii) is:

"government revenue that is otherwise due is foregone or not collected".

That seems to me very different from the IEA definition which uses the concept of a "reference price" in its definition. As far as I can gather, the "reference price" is the calculated "full cost of supply", which seems to be the price that the end-use would pay for the fuel based on international prices.

On the face of it, based on the minimal research I've done, it seem that these would result in very different assessments of how much petrol/gasoline is deemed to be subsidized in a country like the UK where fuel is heavily taxed, and has been for many years. Here in the UK, we have a "fuel duty" which is a flat rate of about £0.58 per litre. On top of this there's VAT (sales tax), which is 20% of the total of the product price and the fuel duty. (Source). This means that the proportion of what we pay that is tax varies depending on the current international oil price. Last year when the bottom fell out of the international oil market (and oil prices actually fell below zero briefly) a litre of petrol in the UK briefly fell to less than £1. But since the £0.58 per litre is a flat rate that meant the percentage of that which was tax was very high. Something like 80%. Even if the fuel itself was given away free by the producer, we'd pay about £0.80 per litre (as pure tax). That's the absolute minimum to which a litre of petrol could drop.

There is a thing here called the fuel price escalator. This is a policy of gradually increasing fuel duty. So, given that it is a government policy, if the government decides in a particular year not to implement it (not to increase fuel duty) then presumably the WTO definition would regard this as a subsidy, because it is government revenue that would otherwise have been due but has been foregone. Whereas presumably the IEA wouldn't regard it as that. Presumably the IEA would regard the already high rate of tax as a the opposite of a subsidy, because it results in the end-user cost of fuel being very much higher than any reference price that might be calculated just on the basis of producer costs.

Generally, it seems clear that the WTO definition relies on some notion of what any given government "normally" levies in taxes on a given product, such that any downward deviation from that norm would be regarded as a subsidy. And the IEA definition doesn't.

Given all this kind of thing, I guess it's not surprising that people have futile arguments as to whether a subsidy is actually present or not. For example, in this article from a couple of years ago, there's an argument as to whether or not the UK government leads the EU in subsidizing fossil fuels. It would seem that the question of whether you think they do depends on whether you use the IEA definition or WTO definition (or some other definition) of "subsidy". In that article, the chancellor (finance minister) is said to have pointed out that not implementing a scheduled rise in fuel duty that year constituted the treasury "forgoing around £46 billion in revenues". Presumably per the WTO definition that would be classed as a £46 billion subsidy.

Steve3007 wrote: ↑November 22nd, 2021, 1:46 pm This question of how to define a subsidy is quite interesting. I looked at the WTO definition and one of its definitions of a subsidy (ii) is:

"government revenue that is otherwise due is foregone or not collected".

That seems to me very different from the IEA definition which uses the concept of a "reference price" in its definition. As far as I can gather, the "reference price" is the calculated "full cost of supply", which seems to be the price that the end-use would pay for the fuel based on international prices.

Thanks for that link. Here is WTO's full defintion:

"1.1 For the purpose of this Agreement, a subsidy shall be deemed to exist if:

(a)(1) there is a financial contribution by a government or any public body within the territory of a Member (referred to in this Agreement as 'government'), i.e. where:

(i) a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);

(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits);

(iii) a government provides goods or services other than general infrastructure, or purchases goods;

(iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;

or

(a)(2) there is any form of income or price support in the sense of Article XVI of GATT 1994; and
(b) a benefit is thereby conferred."

By comparison, here is the dictionary definition:

"1. Monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest."

https://www.ahdictionary.com/word/search.html?q=subsidy

That definition --- which is the one commonly understood when used in most contexts --- is essentially the same as the WTO's (i) above. Fossil fuel companies, at least in the US, receive virtually no subsidies in that sense. Nor do they receive any subsidies as defined in (iii) or (iv) above.

What about (ii)? Well, if the tax code allows deductions of certain costs from taxable income, and if those allowable deductions are those generally allowed for all businesses, then they don't receive any subsidies in that sense either. The revenue thus "forgone" by government is not "otherwise due."

To see what real subsidies are, mass transit systems (in the US) are classic examples. Nearly every US city with a population of 25,000 or more has some sort of mass transit system. In all but one or two cities, 70-90% of the cost of operating the system is paid by taxpayers, not the users of the system. In smaller markets the subsidies range from 80 to 90%. Those are real subsidies.

On the face of it, based on the minimal research I've done, it seem that these would result in very different assessments of how much petrol/gasoline is deemed to be subsidized in a country like the UK where fuel is heavily taxed, and has been for many years. Here in the UK, we have a "fuel duty" which is a flat rate of about £0.58 per litre. On top of this there's VAT (sales tax), which is 20% of the total of the product price and the fuel duty.

In the US automobile fuels are taxes by both the federal government and the states. In both cases, the taxes were originally earmarked for highway trust funds, to be used for maintaining public highways. In recent decades, however, a substantial fraction of that tax (~20%), levied against auto users, has been diverted to subsidize urban transit systems.

Who cares about the details? That's a political standard game of obfuscation; if the detail is not exact then dismiss the entire issue.

As is clear, an INCREDIBLE amount of money has been spent on fossil fuel subsidies. If the lowball 400 billion is most correct (which I doubt) then that is a shocking figure, given the circumstances.

Subsidies for fossil fuel companies - and other special benefits and largesse they enjoy that is not technically classified as "subsidies" by tax accountants - should be phased out, with new jobs being opened up in more socially responsible industries.

I would also ban advertising of SUVs, whose costs to societies are massive - aside from their manufacture being a major source of greenhouse gas pollution - they also cause more deaths, blind spot accidents, road damage, pollution, congestion and the widening of roads and other vehicle infrastructure to cater for their boated presence.

GE Morton wrote:What about (ii)? Well, if the tax code allows deductions of certain costs from taxable income, and if those allowable deductions are those generally allowed for all businesses, then they don't receive any subsidies in that sense either. The revenue thus "forgone" by government is not "otherwise due."

Yes, agreed. As discussed in previous posts, that covers things like tax deductible expenses that we (whether we're individuals or companies) remove from our profit calculation before submitting it in a tax return. But the point I was raising above was about other uses of that tricky word "forgone" in defining the word "subsidy". As I said, if for example there is an established government policy of increasing the tax on some product (e.g. fuel) then according to part (ii) of that WTO definition this could at least be argued to constitute that government forgoing some tax revenue, with the result that simply not increasing a tax could be characterized as a kind of subsidy! And, of course, any notions we might have as to what constitutes a fair level of taxation (for example the proposition that a fair level is defined as an amount equal the value of benefits received by the specific taxpayer from government services) is not directly relevant to this definition of subsidy in terms of "tax revenue forgone".

My take-home message from all of this is that I don't care what we define as a subsidy so much as I care about outcomes, For example, the argument in the Guardian article I cited as to whether the UK subsidizes fossil fuels more than EU countries is not something that interests me (except as a technical discussion about the difficulties of defining things). Given what we've previously agreed about the justification of levying taxes for the protection of commons, as I've said I think the only possible disagreement here is a factual one as to the extent to which anthropogenic climate change really is a pressing problem. (Hence graphs of measured and modelled temperature rises and the like). If, for the sake of argument, we all agreed that it was then I think, (leaving details, semantics and political positions about other issues aside), we'd probably all be in broad agreement.

To see what real subsidies are, mass transit systems (in the US) are classic examples....

Yes, there are similar taxpayer subsidies for mass transit in the UK.

In the US automobile fuels are taxes by both the federal government and the states. In both cases, the taxes were originally earmarked for highway trust funds, to be used for maintaining public highways. In recent decades, however, a substantial fraction of that tax (~20%), levied against auto users, has been diverted to subsidize urban transit systems.

OK. I presume the use of fuel taxes to fund highway maintenance would fit with the ideal that taxes are justified for the maintenance of a common resource from which all motorists benefit. I presume the question of whether the diversion of some of that tax revenue to subsidize urban transit systems fits that ideal depends on the question I mentioned above as to whether we believe that climate change is a pressing issue regarding the protection of a global common. If we think it is, then we could justify that subsidy on the grounds that journeys on mass transit systems tend to use less CO₂ per passenger, so it's justified to use tax policy to encourage its use.

In the UK the tax on motor fuel goes into the general treasury pot along with other taxes.

I guess it's worth noting that even though the semantic issue of what constitutes a subsidy is something that I find interesting only as a technical point, it seems to be of crucial importance not just to people arguing about the role of fossil fuels in climate change but also in talking about trade deals. There are huge arguments between various countries and blocs as to whether they are deemed to be skewing the market by subsidizing their own industries. These arguments tend to stand in the way of free trade agreements. For example, recently there was one between the US and the EU over whether the EU subsidizes its aircraft manufacturing industry, and puts companies like Boeing at an unfair disadvantage. And of course farming is a constant one.

Why are they receiving subsidies at all? I have property and I give people places to live, but the government doesn't provide my business with any gifts.

No, by the time I pay land tax on top of income tax and GST, it's about 50% tax some years, and that side is getting worse. Meanwhile, the American Murdoch plays his games with society, earns billions in this country and has paid zero income tax for over six years. Meanwhile, the fossil fuel companies he endorses (as a longtime fossil fuel company board member) are simply given billions of dollars, no strings attached.

Whether it's three billion as per GE Morton's classification* of the trillion dollars estimated elsewhere, given that we are in an extremely dangerous climate change situation, there is zero valid justification to keep giving them taxpayer money over above that given to other businesses. How can you give them money to cover research into "clean coal" when they have had decades to work on pollution mitigation and did precious little, despite being given billions every year? That's akin to the government giving me the money needed to fix a property after a fire audit. If they engage in poor business practices and fail to plan for the future, then they should suffer losses like everyone else.

Fossil fuel subsidies are simply bucks for the boyz. Straight up corruption.


* Using GE's approach, when considering how much tax I pay, we would only count income tax, not land tax or GST.