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
Well, part of the reason they’re so profitable is because they are heavily subsidized. If your costs are being nerfed by the government, more profit for you. They’d have tighter margins without that subsidy.
The government doesn’t always subsidize businesses that need it to be profitable, either. The government just subsidizes what it wants to see more of. So if the US has plenty of fossil fuel production but wants even more, they could still subsidize it to promote more production.
Lastly, lobbying is a thing that fossil fuel companies are particularly good at. They fight to keep subsidies in the budget year after year, even if they’re no longer very appropriate.
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