Then, of course, we will hear 'The Democrats are going after the coal
companies." Bear in mind that much of the Koch money comes from coal and oil,
including Canadian Tar Sands. The pipelines are supposed to carry the oil from
the tar sands to points of export. Eric
________________________________
From: uupretirees-bounce@xxxxxxxxxxxxx <uupretirees-bounce@xxxxxxxxxxxxx> on
behalf of Marshall Spector <dmarc-noreply@xxxxxxxxxxxxx>
Sent: Sunday, March 28, 2021 8:04 AM
To: uupretirees@xxxxxxxxxxxxx <uupretirees@xxxxxxxxxxxxx>
Subject: [uupretirees] US Fossil Fuel Companies Get a Shocking Amount of
Implicit Subsidies Each Year
https://www.sciencealert.com/us-fossil-fuel-companies-get-a-shocking-amount-of-implicit-subsidies-each-year
US Fossil Fuel Companies Get a Shocking Amount of Implicit Subsidies Each Year
[https://www.sciencealert.com/images/2021-03/processed/fossilfuelsubsidies_600.jpg]
If fossil fuel companies in the United States were made to pay for the real
environmental and health costs of their products, a new model suggests it would
set them back roughly $62 billion dollars every year.
Today, that huge sum of money is implicitly subsidized by taxpayers.
"Fossil fuel companies benefit in a big way because prices currently do not
reflect the environmental and social costs associated with the production and
consumption of fossil fuels,''
says<https://environment.yale.edu/news/article/fossil-fuel-companies-benefit-from-inefficient-pricing-on-climate-and-health-consequences/>
economist Matthew Kotchen from Yale University.
"A change would really affect their bottom lines, and this study estimates how
much."
Kotchen's assessment includes the natural gas, coal, diesel, and gasoline
industries. Using data from 2010 to 2018, his model seeks to put a number on
the financial benefits of current subsidies, while also estimating the true
costs of fossils fuels in terms of environmental damage, health damage, and
inefficient transportation practices.
In the end, those hidden costs are covered by taxpayers in various ways,
including the medical costs associated with climate
change<https://www.sciencealert.com/climate-change> and local pollution,
infrastructure repairs to roads and bridges, and smog-contributing traffic
congestion.
Meanwhile, companies themselves have largely washed their hands of the matter.
If natural gas and oil producers were made to pay instead of taxpayers, the
costs would amount to 18 percent of their net income for the 2017-2018
financial year.
Coal producers, on the other hand, didn't even make enough money that year to
pay for all the damages. In fact, Kotchen's model has found the benefits of
implicit subsidies exceed the net incomes of half of all US coal companies, "in
many cases by a wide margin."
"These numbers clarify why many in the fossil fuel industry oppose more
efficient regulatory reform,"
writes<https://www.pnas.org/content/118/14/e2011969118> Kotchen, "they may also
shape the way policymakers view the prospects for additional subsidies going
forward."
Petroleum producers appear to be the luckiest of the lot. Despite the fact that
burning gasoline and diesel produces significant air pollution and is a major
contributor to global warming, most petroleum companies have been able to evade
responsibility for these consequences.
In 2018, findings from the model reveal both gasoline and diesel companies
brought in a combined $45 billion in implicit subsidies. That same year, the
coal industry got $9 billion on top of their net income, and the natural gas
industry took in $17 billion in benefits.
Today, there are only a few large fossil fuel companies in the US, and these
businesses tend to have their fingers in a variety of industries, which means
their implicit subsidies are providing them huge advantages across the board.
In 2018, for instance, the full implicit subsidies for natural gas, gasoline,
and diesel saved ExxonMobil $1.4 billion and saved Chevron $908 million. The
coal company Peabody Energy Corp, on the other hand, received a whopping $1.56
billion slice of the subsidy pie.
Nor does this include the $33 billion of benefits to other oil producers and
downstream suppliers of fossil fuels in the US retail markets.
In fact, this model only takes into account the consumption of gasoline and
diesel and not the additional subsidies associated with other petroleum
products, like heating oil and jet fuel.
"The producer-specific benefits, therefore, should be interpreted as an
underestimate," Kotchen writes<https://www.pnas.org/content/118/14/e2011969118>.
Compared to explicit subsidies in the US, which equal
roughly<https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs>
$20 billion a year, implicit subsidies are not talked about nearly as much,
although scientists and economists are trying to change this.
A recent estimate<https://ideas.repec.org/p/jbs/wpaper/201502.html> found
implicit subsidies in 2011 amounted to about $800 billion globally. This is
clearly a market failure, where real and substantial costs are not being taken
into account. Kotchen's model is the first to trace the financial benefits back
to specific producers.
"Hopefully these results will contribute to ongoing debates about climate and
energy policy"
says<https://environment.yale.edu/news/article/fossil-fuel-companies-benefit-from-inefficient-pricing-on-climate-and-health-consequences/>
Kotchen, "and they may also shape the way policymakers view the prospects for
additional subsidies going forward."
Before publishing his results, Kotchen reached out to all of the companies
studied. None of them had anything to say on the matter.
The study was published in the Proceedings of the National Academy of
Sciences<https://www.pnas.org/content/118/14/e2011969118>.
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