Just read a bit about the massive subsidies the fossil fuels industry receives in the U.S and I was confused. Aren’t these companies one of the most profitable ones in the U.S?
In: Economics
Its a few things, but first my disclaimer that I don’t know all jurisdictions and tax structures.
1) it’s not really subsidized in the way you think, but talking about subsidies in a general sense is a great way to get people worked up and angry at a target.
2) most actual subsidies are on the consumer end, to make fuel cheaper this does not really affect the fossil fuel industry aside from removing an incentive to find our sources of energy.
3) most articles that talk about the “massive subsidies” are generally talking about two things.
A) royalty breaks until capital costs are paid out.
B) (the really dishonest one) some folks will calculate what they believe the cost of climate change is, then further assume that society is covering that full cost as a subsidy to the fossil fuel industry, this shows absolutely massive subsidies, but it completely neglects the consumer and the actual end user emitters.
In the end actual real subsidies in first world countries are actually quite small when you consider tax incentives are very common for most industries.
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