Guest contribution by Willis Eschenbach
There is a new study in the process of the National Academy of Sciences that is being played up by phys dot org under the heading
Fossil fuel companies receive implied subsidies of $ 62 billion annually, economists report
Whenever I hear about “implicit subsidies”, “social costs” or an accounting for “external effects”, my bad number detector rings like crazy. The problem is that almost anything can be considered an “implicit subsidy” or one of its equally vague cousins.
The study, which is of course paid for, is called by Matthew Kotchen “The producer benefits of implicit subsidies for fossil fuels in the USA”.
So … what is an “implicit subsidy” for the eeevil fossil fuel companies?
Like any good liberal, he starts with his favorite fear tactic, “climate change”. Let me digress about that for a moment.
For about forty years people have been warning us about a so-called “climate emergency”. The Oxford Dictionary defines “emergency” as “a serious, unexpected, and often dangerous situation that requires immediate action”. Since we have been breathlessly warned of this “emergency” for forty years and there are absolutely no signs of it, it is hardly “unexpected”. And since we have seen neither “serious” nor “dangerous” results from this situation, it is a sick joke at this point to call it an emergency. And that’s just the beginning of why calling our current situation a “climate crisis” or “climate emergency” is just chicken screaming for the sky to fall.
Here is the current situation. The crop yields continue to rise.
The rise in sea level is not increasing. The number of extreme weather events such as hurricanes, floods and droughts is unchanged and has always been with us. Deaths from climate-related disasters are lower than ever.
The extra CO2 has increased “greening” by about 10%, the amount of new plant life that covers the planet. The 300 year gradual warming has been generally good for humans, animals, and plants. Cold kills. Today, people from rich to poor are generally better fed, better dressed, better housed, and better isolated from the endless historical vagaries of the weather than ever before in history … what’s the problem?
So I call bullshi @ t all of the climate emergency nonsense. Where is the “emergency”? We have seen about a degree and a half warm since 1800. I kept asking someone to point out the catastrophic negative effects of this warming … barbecuing …
But I digress. Kotchen assumes that the companies will receive a subsidy for every tonne of CO2 emitted. When fossil fuels are burned, around 37 gigatons of carbon dioxide are released each year. So right there there is a huge, completely invisible and completely meaningless “implicit subsidy”.
Now I can’t find out how Kotchen calculated the amount of the “climate subsidy”. He says he uses the Nordhaus estimate of what is known as the “social cost of carbon,” which is $ 31 per tonne of CO2 emitted. But that would bring the “implicit subsidy” to $ 1.15 trillion Dollars, and its total is only “only” $ 62 billion. However, being an economist, he has covered his work with thick layers of confusion and confusion, such as splitting the “implicit climate subsidy” into separate amounts for “foreign climate” and “domestic climate,” and I haven’t had the time nor a tendency to unravel the idea that “Climate” has domestic and foreign versions. Suffice it to say that the bulk of the “implicit subsidy” is imaginary climate cost.
So what else counts as an “implicit subsidy” on Kotchen’s planet? Well … pollution. People very rarely have “pollution” listed on their death certificates, so economists have complex computer models to spit out the number of “years of life” lost from pollution. Of course, like with climate models, no one knows whether the numbers are in any relation to reality, and no two of them give the same answer. So I suspect that Kotchen only packed and used the largest numbers.
From there, however, it gets really bizarre. The other three items that are treated as “implicit subsidies” are the imputed costs of traffic jams, car accidents and road damage.
Seriously. Street damage.
I suspect you would never have thought it was an “implicit subsidy” for Exxon Mobil when your local transportation authority used your tax money to repair potholes …
The logic seems to work that way. If we didn’t have fossil fuels, we wouldn’t have costs in pothole repairs, car accidents, and traffic jams. So all of these costs are an “implicity subsidy” for BP, Exxon, Total, and the other fossil fuel company. Of course we wouldn’t have cars without fossil fuels … but somehow it doesn’t matter.
Now I just can’t follow that logic. For example, if we didn’t have fossil fuels, we wouldn’t have any costs for roads, bridges, and traffic lights. Then why doesn’t Kotchen count the cost of the “implicit subsidy”?
One could argue that he is only looking at the cost of Damage (Potholes, crashes) and inconveniences (congested roads) caused by cars … but if so, what about the damage from planes, trains and ships? The good ship Ever Given has already caused costs of tens of billions of dollars due to the “overload” on the Suez Canal. Why are these costs not taken into account? In addition, maritime transport already contributes 2% to 3% of global greenhouse gas emissions. Ships that have to circumnavigate Africa instead of crossing the Suez Canal and that travel faster to make up for lost time mean additional fuel consumption and additional emissions. However, it is not the first time something like this has happened, and such past shipping, train and airport costs and additional emissions are not taken into account. Runways and railroad tracks need to be repaired like roads, but these costs are not accounted for. Why?
(I suppose I shouldn’t give Kotchen any ideas or he’ll soon have up to $ 124 billion in “implicit subsidies” instead of his current $ 62 billion demand …)
This highlights my biggest problem with such “external costs”, “social costs”, “external effects” and “implicit subsidies” – people like Kotchen, who pull these numbers from their fundamental openings, can choose anything they want to include or include exclude.
And here’s the second biggest problem for me – the underlying logic doesn’t make any sense. Look, they count traffic jams and car accidents as an “implicit subsidy” to Exxon because it is damage caused by the use of fossil fuels …
But if so, shouldn’t we consider the cost of damage computer damage caused by online computer crime as an “implicit subsidy” to computer manufacturers?
Or how about the electric shocks and house fires caused by people with poor electrical house wiring? Is it an “implicit subsidy” to Pacific Gas and Electric, my local utility company? If the fossil fuel people are burdened with “implicit subsidies” for powering cars, shouldn’t PG&E be burdened with “implicit subsidies” for powering homes?
Well, one could argue that pothole repairing is an “implicit subsidy” because it is paid for in taxes … but at the end of the day the government has no money so the cost always ends up on part of the population, just like they do Costs for house fires, traffic jams and computer crime.
Finally, he goes into great detail about which energy companies receive which subsidies … when in fact they are not burning fossil fuels. If a man sells me a knife, am I not doing it to myself and not to the Gerber Knife Company? Whether I use it to carve a Thanksgiving turkey or my neighbor is up to me, not the knife supplier. When I buy some oil, it’s up to me whether I use it to make nylon for ski jackets or burn it to generate electricity, not Exxon or BP. Why should the “implicit subsidies” benefit the oil companies? ? I want my implicit oil subsidy and I want it now!
My conclusion? I see no logical reason why pothole repairs are an “implicit subsidy” to those horrible people whose only crime is to provide the energy that has lifted the world out of misery, disease and poverty.
I must add, however, that the amount of Bumwad that has been peer reviewed and published in “scientific” journals these days is a crime against science …
It was nice and warm here, so the good woman and I went to Occidental, our local “Census Designated Place”. It’s not a city, not a city council, not a mayor, so that’s what they say. As always, I was amused by the statue by an amazing local sculptor named Patrick Amiot. It’s in the middle of Occidental as a tribute to the person we’ve ever been closest to a mayor, a man everyone called “Ranger Rick”. Here he is in his perennial hat from the San Francisco Giants.
Occidental is a wonderful place, a village from another time. I wrote about Ranger Rick here almost a decade ago.
Business in Occidental is coming back to life, and if Governor Newsom ever gets up from his dead star and ends the lockdown and masked the madness, we’ll be fine. When the Texas governor did this 26 days ago, Joe Biden called it “Neanderthal thinking” and said it risked “thousands more deaths” … but that’s actually how it worked.
Data source: https://www.worldometers.info/coronavirus/usa/texas/
You say 26 days is not enough time for new deaths? OK, here are new cases …
Data source: https://www.worldometers.info/coronavirus/usa/texas/
As you can see, the unmasking and blocking mandates in Texas didn’t make the slightest difference.
This is the first pandemic in history where we quarantined the healthy instead of the sick, and it was a completely unqualified disaster. As I posted a year and a week ago, End The American Lockdown Now. Our response to this pandemic has been completely insane.
And while this wonderful woman and I wait for sanity to return, we had outdoor tacos at the Mexican restaurant and enjoyed people-watching on a beautiful spring day.
Best of the sunshine to everyone keep laughing or you’ll cry
w.
The usual: If you leave a comment, please quote the exact words you are discussingSo we can all make it clear what and who you are talking about.
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