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
There are really two types of subsidies, which exist for very different reasons, subsidies for consumers and producers.
For consumers, these subsidies exist for a pretty basic reason, to allow poorer consumers access to some of the basic things fossil fuel provides (heating/electricity/transport).
As for why producers are subsidized, there are also two main reasons for subsidies. The first is national and is mainly a belief that the US should be energy independent more or less for it’s national security (to not have to rely on other countries in case of conflict). There are also local subsidies (mainly at the state level), for fossil fuels and many other industries, in order to push businesses to establish themselves in very specific places, because the local government hopes that having that industry there will be more economically beneficial than it costs in subsidies
Edit: Just a little added info… fossil fuel subsidies are not a US exception. Most if not all countries have fossil fuel subsidies and the per capita or % of the GDP of the US is actually lower than many other countries.
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