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Comment by mikeash | Hacker News Reader

It’s an unconventional way to use “subsidy,” but I think it fits.

Imagine a garbage company. The government pays them so they can buy land where they dump their garbage. Obviously a subsidy.

Now, let’s say the government buys the land themselves then gives it to the company for dumping. No money changes hands but this is still pretty clearly a subsidy.

Instead of giving the company land, the government retains ownership, but lets the company dump there for free. Still a pretty clear subsidy.

Instead of buying the land, the government just takes it. Now no money is involved at all, but it’s still a subsidy.

Instead of taking the land, the government just declares that it’s legal for the garbage company to dump trash on other people’s land, and the owners just have to deal with it. This is quite different in the details from the original subsidy, but the overall effect is essentially the same.

Polluters are in a situation that’s exactly like this last scenario. They get to dump their trash on everyone’s property and don’t have to pay for the privilege. They’re being subsidized in an amount equal to whatever payment it would take to get everyone to willingly accept this trash.

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This is wrong because subsidies aren't just externalized costs. They are defined as monetary gifts. You're extending the definition by analogy and arguing that a company externalizing its costs is the same thing as a subsidy, but a subsidy implies direct and deliberate support.

This is important for a couple of reasons: The main one is that it's confusing to redefine subsidy when you can just say "cost" and have people understand you. People reading this survey might see the $5.2T number and assume that that cost is in addition to whatever the cost of climate change is and will have to read the paper to understand otherwise. This is unnecessarily confusing even if one were to grant the logic of it.

In addition, when people discuss subsidies, they are often most interested in government policy. The purpose of a subsidy often is to increase a certain kind of business, so we might worry about unnecessarily funding the fossil fuels and thus encouraging climate change in a manner above and beyond simply allowing them to be used the way we've always done, but that's not quite what's going on here.

One thing to keep in mind is that it's a lot easier to measure a genuine government subsidy than an externality. So the distinction matters in that regard as well. Any measure of the cost of climate change is to at least some degree speculation, whereas any attempt to measure the direct amount of money given to fossil fuel companies can probably be much more exact.

Gifts in kind aren’t subsidies? If the government gives equipment or resources or labor, rather than money, it’s no longer a subsidy? That sure doesn’t fit how I understand the term. What would you call those?

"Gifts in kind aren’t subsidies?"

They can be but that's less common. The key difference is that a subsidy is direct and an active policy.

For example, when people talk about subsidies for renewables, they aren't talking about any externalized costs of manufacture, which do exist, they are talking about direct government gifts and tax breaks deliberately put in place to encourage investment in renewables. When people talk about subsidies given to fossil fuels the same is true, especially when they are being compared to renewables as is the case in this discussion.

Edit: removed word "decision" to clarify my meaning

Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision. It's perhaps not a frequent point of policy discussion, but it's still a decision - particularly when we know the cost of climate crisis mitigation is so high.

"Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision."

No, it's a passive policy decision by definition.

Why? What definition?

The refusal to collect costs those polluters put on everybody is as active an decision as the decision not to collect taxes (tax breaks) that you'd otherwise use to keep the country running for everybody.

It's an active policy decision to have the state stay passive and do nothing.

It's an active policy decision in any country where a proposed "polluter pays" type law has been voted down.

Choosing not to make a choice is a choice itself - additionally this portion of policy has been heavily debated societally - it's not like we're talking about something so obscure that actually opening up a discussion on it will require a heavy expenditure of labour to properly research the topic.

Why do subsidies have to be an active policy decision?

You’re right, when people talk about fossil fuel subsidies, that’s thinking of government gifts and tax breaks. My point is that this is a deeply inadequate way to think about it. If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are.

"If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are."

In the case of this discussion, you're looking at it backwards. The subject of fossil fuel subsidies was brought up in comparison to subsidies for renewables which in this case were already defined as specific government programs. If it weren't for that, I wouldn't be being such a stickler. However given that we are comparing renewables to fossil fuels we need to be sure that we are measuring the same thing and to include externalities when measuring fossil fuels and not when measuring renewables is to be not measuring the same thing. (I actually got confused when I first saw the IMF link so I know my concern isn't hypothetical.)

Yes, I get that the case can be made that cost of using fossil fuels is more that the sum of direct gifts by the government to fossil fuel companies (fucking duh!) but that can be expressed without implying that governments gave $5.2T in tax dollars directly to fossil fuel companies in 2017. Where confusion is possible, it's best to make distinctions and clarify what is meant.

"subsidies" includes both direct and indirect subsidies.

We can measure direct subsidies by measuring real and effective tax rates.

We can measure indirect subsidies like healthcare costs paid by Medicare with subjective valuations of human life and rough estimates of the value of a person's health and contribution to growth in GDP, and future economic security.

But who has the time for this when we're busy paying to help folks who require disaster relief services from the government and NGOs (neither of which are preventing further escalations in costs)

Problem is that if the word "subsidies" is used exclusively to mean a specific and narrow concept around cash transfers when talking about renewables, but then you use the term to include a much broader set of scenarios when talking about fossil fuels, while directly comparing the derived numbers, then you're misusing the language in order to deceive, regardless of all else. You're communicating that the numbers represent the same calculations for both forms of energy, when you know that they actually don't.

Define the terms however you like, as long as you are careful to not to induce people to believe someone that is untrue.

It’s true that you have to measure the same thing, but you also have to measure a useful thing.

If you compare fossil fuels and renewables based on the number of letters in their names, that’s the same thing for both, but it’s not useful.

Comparing explicit monetary subsidies is like that. If you want to include the implicit ones for renewables as well, you definitely should. But giving up and only comparing direct monetary subsidies gives you a woefully incomplete and misleading picture.

You're arguing that we should be comparing the total cost of the fossil fuel and renewable energy industries. If the discussion is mainly about the direction society should take with regard to energy, then I would agree with you. But there are still contexts in which it is useful to talk strictly about subsidies. For example, when discussing how much an industry depends on direct government action, which is the context of this whole discussion we are having right now. (ie Solar and Wind Power So Cheap They’re Outgrowing Subsidies, in which the my definition of subsidy is the one being used, I'm pretty sure.) Yes, there are time where it's more important to discuss the big picture, but there are also times it's worthwhile to discuss the details and language should retain the detail to do both.

There's another reason this is important and it is with regard to the big picture. A lot of people already know what subsidy means and understand it to mean direct government gifts. When you use a different definition of a commonly understood word, what you are doing is defining it stipulatively. If you don't clarify that you are using a stipulative definition ahead of time, then you are committing a fallacy of equivocation. It doesn't matter if you think that your stipulative definition makes more sense or is more useful, people have to be using words the same way in order to communicate. I'd rather not give climate denialists any more fuel than is absolutely necessary and confusing equivocations are unnecessary. Talking about subsidies when you mean subsidy and talking about costs when you mean cost helps avoid them.

Then it's a gift in kind and a subsidy.

When I litter, I get fined, but those companies are not when they litter e.g. carbon all over. When I dump chemicals into nature, I get fined for polluting the environment or even imprisoned outright, those companies do not e.g. when it's in the form of "emissions". Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions, while a lot of commercial vehicles and fuels for these vehikles get a reduced rate or even excluded from taxation. But cars here are taxed far less so than in other European countries. etc.

The governments are clearly aware that pollution and dumping your garbage are things you should not do or at least minimize. They made laws against it, but actively decided to exclude certain business sectors and/or certain types of pollution, or actively decided not to regulate or tax certain types of pollution while regulating/taxing others.

"Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions"

Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. Taxes and subsidies are often instituted in response to negative and positive externalities, but that doesn't change the fact that they are different things. This is important when trying to draw policy comparisons which is our situation here.

You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing, and that's an entirely different discussion, but it doesn't mean that they are factually the same thing. There is a practical difference in terms of how things are measured and how policies are compared across industries and governments and that difference matters.

>Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point.

The stated policy goal in part is to reduce emissions to met climate targets to fight climate change, so yes.

>You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing

It is.

>but it doesn't mean that they are factually the same thing.

First of all, the meaning of words and political concepts are never factual.

But I'd still argue that at a high level they are the same, and both are subsidies. In both cases the government refuses money it would otherwise collect from different parties, thereby gifting those entities value you can put a price tag on.

Those decisions are active decisions NOT to do something (while doing something about the same thing or very similar things when it comes to other parts of the population), at least at this point.

The only distinction I'd make is between direct subsidies (the government forks over money) and indirect/implicit subsidies (the government decides not to make certain entities pay for certain things for which other entities have to pay the government).

">but it doesn't mean that they are factually the same thing.

First of all, the meaning of words and political concepts are never factual."

You're still missing the point. The point is that there is a distinction between a subsidy and an externality and that distinction is important. It's important for measurement reasons (The exact monetary amount a government spends on something is easier to measure than the indirect cost of a policy,) and for simple communication reasons. It makes no sense to talk about instituting a tax to cover a subsidy. You institute a tax to cover an externality. It also matters because there are ways of dealing with externalities other than taxes and subsidies and reducing the language makes this more confusing. It's especially confusing when the distinction is made in one discussion (about renewables) but not in the other (about fossil fuels.)

There is a term for using an unexpected definition for a word that already has a widely used definition during a discussion, that is a 'stipulative definition'. It's dishonest to do so without being clear upfront or in response to a discussion where the original definition is in use. This results in equivocation. Whether or not a subsidy is morally equivalent to an externality is a moot point if you're willing toss about with the language. My work involves financial reporting and if my employer asked for one set of numbers and I gave him another that I argued were 'morally equivalent' would pretty clearly be in the wrong, even if the point I was making about moral equivalence was correct.

No, you're splitting hairs.

There are direct and indirect subsidies. Indirect subsidies include externalities: external costs paid by everyone else (that the government should be incentivizing reductions in by requiring the folks causing them to pay)

Semantic digressions aside, they're earning while everyone else pays costs resultant from their operations (and from our apparent inability to allocate with e.g. long term security, health, and prosperity as primary objectives for the public sphere)

Handing money to polluters helps polluters, and failing to disincentivize externalities also helps polluters, but it's OK to call one thing a subsidy and the other thing poor governance.

"Subsidy" carries a connotation of purposeful action to help something. Subsidizing a bad thing is worse than merely allowing it to happen or looking the other way. It seems like you want to re-label things in "B" by the label for "A" to make it sound worse.

>"Subsidy" carries a connotation of purposeful action to help something.

Purpouseful action implies awareness and intention.

Externality implies not yet recognized.

Having 2 words for similar concepts does not mean they are different concepts. "heavy" and "massive" are two different words but they convey essentially the same thing.

I would agree that unrecognized externalities are not subsidies, say CO2 pollution before it was recognized, but then again since they were literally not recognized as externalities (yet).

But the very moment CO2 pollution is recognized, the previously unrecognized externality is to be instantly viewed as a subsidy.

History repeats itself, the first time as a tragedy, from then on as a farce.

For that logic to work we would need e.g. a carbon tax, such that there would be a straightforward monetary value associated with any exceptions that might be granted.

The point is, a subsidy is when one entity possesses resources (money, equipment, etc.) and grants those resources to another party without expectation of a positive return on investment. Some argument can be made that a tax break is a subsidy, but I've often seen that framing used to mislead people into thinking that their tax dollars are actually being spent on the recipient of the tax break (e.g. Amazon in NYC). Trying to put speculative and indirect costs predicted to happen decades in the future under the label of subsidies crosses the line into intellectual dishonesty.

It's not hard to make good arguments for decarbonization of energy production, so using rhetoric with questionable intellectual honesty is often counterproductive.

Here's my reply to your comment below, HN is probably limiting a shared IP:

Your question is self-contradicting. "What if an entity doesn’t possess those resources, but gives them anyway" If an entity does not possess those resources, it cannot give them away. So the crux of the question is whether taking resources from another entity is a subsidy and the answer is no. When the Romans enslaved their neighbors and took their land, it'd be ridiculous to say that the Gauls, Carthaginians, etc. "subsidized" the Roman Republic and Empire. They did not help the Romans expand, in fact they resisted their expansion through force. Affecting climate through greenhouse gas emissions is much less direct than military conquest, but the dynamic is the same.

Good arguments can be made by pointing out that emissions are harmful and degrade our ability to live in our environments, even though carbon free energy production is more expensive. The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce.

What if an entity doesn’t possess those resources, but gives them anyway by taking them from someone else because they’re powerful enough to do it, does that count?

>The consequence of people resorting to intellectual dishonesty to try and inflate the cost of fossil fuels make people think that proponents of climate change are naive to the economic reality that carbon free energy, especially renewables, are much more expensive to produce.

Except they're not more expensive. The sheer economic damage that greenhouse emissions produceare just as inherent as if your groceries are delivered by a truck that regularly smashes through people's houses on the way.

You can't say the truck delivery is "cheaper" than taking the road route, just because the government hasn't forced the truck driver to pay for the houses that were wrecked. I mean you can, but it's an accounting trick. It only exists on paper.

You could say "it's not subsidy", but semantics aside, what is it called when the government makes something cheaper through its deliberate choice to charge less than normal (or none) for a certain group? In common parlance, if EVs get 50% off their registration fees, people say "the government subsidises EV registration fees", even if technically they're simply not charging the money in the first place. How is this different to fossil fuels? You could say that they reduced the fees from historical pricing, but then Australia had a carbon price that was abolished (for purely political reasons, FYI) - does that count as subsidising fossil fuels?

"subsidy" and "externalized cost" aren't mutually exclusive concepts (as you hint at in "...because subsidies aren't just externalized costs" [emphasis mine]), so your semantic argument rests on shaky foundations. an externalized cost can be considered a subsidy in many contexts, including legal/political ones.

like most words, "subsidy" may have a more specific meaning in a particular context, but understood differently in a general context. so taking a stance that one definition is better than another is relatively futile (in the sense that it convinces no one who's not already sympathetic).

so rather than relying on semantics, make the argument you're really trying to make, which, by context, seems to be that you don't think externalized costs should be used in the comparison.

They were making the argument that the headline shouldn't use an intentionally misleading word when there is a much better suited word that accurately and clearly conveys the meaning. Using a "technically correct" word isn't a defense when the vast majority of your target audience isn't going to properly understand the true meaning.

Pretty sure if anyone should be using 'technically correct' terms from the field of economics, it should be the IMF.

It's also not technically correct. Externalities are externalities because they don't effect price while subsidies inherently effect price.

"so rather than relying on semantics, make the argument you're really trying to make, which, by context, seems to be that you don't think externalized costs should be used in the comparison."

No, externalized costs are important to take into account when making policy decision. Obviously we should be worried about the costs of climate change.

The point I really want to make is that this is the wrong context in which to include externalities in the definition of subsidy because we are already implicitly using a definition of subsidy provided by the OP which excludes externalities.

You are correct, at the expense of conversation.

Or in another sense, the loss of conversation is a hidden subsidy toward his correctness!

i'm not sure how it's the wrong context, but no matter. my point was that the semantic argument is entirely beside the point.

the real question is whether we should consider the externalized costs of fossil fuels in policy decisions, and if so, when and how?

fossil fuels have favored status (not undeservedly) across the world. given what we know now about how it's extraction/use effects the world, including on us humans, should we continue to favor it over other energy sources?

in my estimation, fossil fuels have a useful place in our energy history (as an energy intermediary), but can only be a stepping stone to a more sustainable energy future that more directly harnesses energy from the sun (our ultimate energy source anyway). on the way, we should reduce the harmful impacts of fossil fuels as much as possible, without regard to the profits of oil magnates.

"i'm not sure how it's the wrong context, but no matter."

Actually, this is important. The original article talks about government subsidies in the renewable energy market. It's only talking about direct subsidies and tax breaks, not externalities. In response, someone posted an IMF report about subsidies in the fossil fuel market as a comparison. This report does include externalities. This means that we are not comparing apples to apples. It creates the impression that governments directly gave $5.2T to fossil fuel companies in 2017, which is not the case.

My broader point though, is that the distinction between an externality and a government policy meant to deal with that externality is a useful and important distinction to make. Some people on this thread seem to be arguing that because they see no moral distinction between the two (this is debatable but doesn't matter to my argument,) that there should be no semantic distinction, but I disagree, and strongly.

For one, these things are measured differently, and the government policy is usually set in terms of the externality. Subsidies and taxes directly impact a government's budget whereas externalities don't (at least not in the same way) which matters when doing public accounting. Subsidies and taxes are mandated by law whereas exxternalities exist as a result of economic activity. Externalities can also be addressed by means other than taxes or subsidies.

By way of analogy, consider the reverse. There are both positive and negative externalities. We sometimes subsidize industries in order to encourage positive externalities. For example, schooling is often publicaly funded in first world nations because having an educated populace is a positive externality. If an untaxed negative externality is the same as a subsidy then it stands to reason that an unsubsidised positive externality is a tax. If in improving the appearance of my home I improve the value of my neighborhood (a positive externality) did I just get taxed the value of my neighborhood's value increase and am I owed a subsidy as a result? I think that most people would answer 'no'.

There’s one more important point: if you include externalities in your subsidy calculation you shouldn’t only count negative externalities. Maybe there are none but taxes on fossil fuels usually end up being very regressive taxes on people with older cars who can’t afford to upgrade. Just as one example of a potential positive externality of cheap fossil fuels.

And a negative externality of education might be forcing older workers out of jobs. (Admittedly a stretch, but making this just for the sake of argument.)

The point is once you start including externalities in your subsidy calculations things get super fuzzy fast.

Collecting taxes on these externalities does not say what you use those taxes for. The true cost is the inefficiency from poor resource utilization, hand that money out based on say income and people will buy more efficient cars etc.

Net result lives saved from cleaner air without undo burdens on the poor.

sure, the studies may not be exactly comparable, and pointing that out is reasonable and even helpful. and yes, costs (including externalities) are not the same as the policies (e.g., direct subsidies) addressing them. but there is a relevant term in policy and economics for non-monetary benefits: "indirect subsidies", so again, your semantic argument is on shaky ground.

anyways, these are unimportant relative to the acute problem that burning fossil fuels kills people as well as other creatures great and small (not to mention other retaliations by our planet), especially considering that renewable alternatives are becoming economically attractive.

so let's price in those negative externalities (which on the flipside is reasonable to view as subsidies to the fossil fuel industry due to their market distorting effects) so that the invisible hand considers all costs in its march toward the optimal allocation of global resources.

> Any measure of the cost of climate change is to at least some degree speculation, whereas any attempt to measure the direct amount of money given to fossil fuel companies can probably be much more exact.

It's dishonest to differentiate these and just opens up the agents to game your definitions. Which they of course are doing.

The fact that similar things are analogous or have similar effects doesn't mean they are the same thing. The purpose of that massive collection of words in the unabridged dictionary is to draw fine distinctions.

For an example, trade tariffs and quotas are similar in almost the exact same way you describe here and have very similar effects. However the distinction is in how the financing for the costs works. Who pays? How directly do they pay? The answers explain why tariff isn't a quota.

In your example as well, you change a payment from a direct monetary one to a diffuse externalized cost, thus creating a distinction. The language has evolved to capture that distinction, your desire to conflate the two notwithstanding.

A subsidy is a direct monetary grant.

> It’s an unconventional way to use “subsidy,” but I think it fits.

I'm just gonna stop you right here.

If your goal is to communicate effectively and honestly, using unconventional usages of words is not the way to do it. Language is a convention for transferring ideas from one person's brain to another person's brain. If you have an idea in your head and you say something that puts a different (and in this case, incorrect) idea in someone else's head, you're miscommunicating. If you do that intentionally, that's lying.

When people read the phrase "The US government subsidizes fossil fuel companies", people think that the US government is giving money or other resources to fossil fuel companies. So if that's not what you mean, when you say it, you're not saying the truth.

The rest of your post is just trying to justify why the not-truth you're saying is kinda-sorta the same as the truth, but that's really not an argument I'm interested in entertaining. Let's just say the truth, please.

It is completely adequate to say, "Solar currently needs subsidies to compete with fossil fuels, but when you figure in the cost of damages caused by fossil fuels, solar is cheaper." We don't need to lie about this.

So by this logic, allowing people to breathe and use the bathroom is a government subsidy, since its a passive policy that doesn't charge you what you would have to pay everyone in the world to let you do it? And where did the "owners" who would have to be compensated get the land and materials that they now own? Wouldn't that also count as a subsidy (every material item was at some point pulled from the ground, even though I don't feel I've been compensated for these externalities).

I mean, being able to use bathrooms in government buildings as a non-employee is definitely a service that is being optionally provided to you by the government - and that service is being supported by funding to have those bathrooms serviced and cleaned more often then they otherwise would need to be.

If the government allowed your neighbors to use your property as their sewer without paying for the privilege, that would definitely be a subsidy for them. We make people clean up their sewage before dumping it.

Breathing isn’t an issue only because it’s a negligible quantity. If it was more significant, we’d have to have rules around it just like we do for other human waste.

Definition of subsidy, from Merriam-Webster:

    a grant or gift of money: such as

    a : a sum of money formerly granted by the British Parliament to the crown and raised by special taxation

    b : money granted by one state to another

    c : a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public

What a tortured analogy. It’s just an externality. We have a word for a it already, no need to try to change another word.

The only reason the paper authors called it a subsidy is because people sadly don’t care about externalities nearly as much as subsidies.

It’s not an analogy at all, let alone a tortured one. Polluters are allowed to dump their trash on my (and everyone else’s) property without paying for it.

Now, if you object to it being called a subsidy, fine. (Although I’d like to know which step in my story stops qualifying as one.) But “a tortured analogy”? No way.

But it is tortured because the numbers are made up. Yes, there is very strong scientific consensus global warming is bad, and getting worse, but pinpointing an exact number and calling it a "subsidy" implies they know a lot more about the future than they actually do. It's untruthful and plays into the hands of those screaming "fake news!" who try to deny climate change.

"Your logic is right, but I doubt the exact number you used." is very far from saying an analogy is "tortured". It's an agreement that the analogy is correct.

I didn’t use any numbers at all. Perhaps you meant to reply to a different comment.

>It’s not an analogy at all

Then why are you talking about a garbage company? Your whole comment is building an analogy.

>Although I’d like to know which step in my story stops qualifying as one.

This is where it stops qualifying:

>Instead of taking the land, the government just declares that it’s legal for the garbage company to dump trash on other people’s land, and the owners just have to deal with it. This is quite different in the details from the original subsidy, but the overall effect is essentially the same.

The government saying "it's legal to do X" and all companies in any industry and any individual (what we're talking about is CO2 emissions) are allowed to do it, it's not a subsidy. It's just behavior with an externality that the government doesn't tax.

I’m talking about a garbage company because they’re an example of a polluter that can’t just dump their pollution wherever they feel like, and their pollution is much more visible. It’s not an analogy, it’s an example. Polluters aren’t analogous to companies dumping trash on your property, they are companies dumping trash on your property.

Do they really think being dishonest and manipulative won't backfire?

It's one thing to argue that we should consider unpriced externalities subsidies -- I'd even agree -- but it's quite another to use this alternative proposed definition/classifcation in order to intentionally cultivate a misrepresentation of the underlying facts.

People notice shit like this and don't take kindly to being misled.

I'm pretty sure that you and kortilla are in agreement.

We mostly are.

The difference is that I don't object to the terminology, just it's intentionally deceptive application.

Surely the tortured is creating externality, a reasonable sounding technical term, as a shorthand for "pft, someone else's problem" in economics.

The WTO are happy to include money not spent, or tax not received as valid when deciding if a subsidy is in place.

> What a tortured analogy.

Reminded me of this exchange:

Bart: Uh, say, are you guys crooks?

Fat Tony: Bart, um, is it wrong to steal a loaf of bread to feed your starving family?

Bart: No.

Tony: Well, suppose you got a large starving family. Is it wrong to steal a truckload of bread to feed them?

Bart: Uh uh.

Tony: And, what if your family don't like bread? They like... cigarettes?

Bart: I guess that's okay.

Tony: Now, what if instead of giving them away, you sold them at a price that was practically giving them away. Would that be a crime, Bart?

Bart: Hell, no!

There’s a clear point where Fat Tony goes off the rails: depending on your view, it’s either right at the start (if you believe it’s not right to steal bread to feed your starving family) or at the point where he spontaneously switches from bread to cigarettes.

I’m curious which part of my comment you think plays that role.

It was just a joke, but note that an analogy can die by a thousand cuts. Fat Tony's argument is extremely weak at every step (family => "large family", bread => cigarettes, give => sell).

Could you find one economist that would say that an unpriced externality is not a subsidy?

This isn't a tortured analogy, it isn't an unconventional use of the term, these things are economically equivalent.

Most people don't know the word "externality," so using a less precise term that they do know is not in any way deceptive.

In my experience, economists don't usually conflate subsidies with negative externalities any more than the conflate positive externalities with taxation.

"Most people don't know the word "externality," so using a less precise term that they do know is not in any way deceptive."

People do know the word 'subsidy' and most know that it means a direct gift or tax benefit by the government which is not the same thing as an externality. What's more, they do know the word 'cost' as well, which is much clearer in this case than 'subsidy'.

Thanks for the fantastic contributions to this topic, respect.

I have a degree in economics. So you've found one.

A subsidy is a direct monetary transfer. A diffuse externalized cost does not qualify.

> Could you find one economist that would say that an unpriced externality is not a subsidy?

All of them?

>This isn't a tortured analogy, it isn't an unconventional use of the term, these things are economically equivalent.

No they are not. This isn't the equivalent of a tax break that other companies are being taxed for. It's a think for which no taxes exist for anyone. No industries are being taxed for these externalities.

It doesn't fit any of the dictionary definitions: https://www.merriam-webster.com/dictionary/subsidy

>Most people don't know the word "externality," so using a less precise term that they do know is not in any way deceptive.

It's not a less precise term. It's the wrong term. Might as well call it a bailout if you're going for political outrage.

But turning around and trying to frame externalities as subsidies is intellectually dishonest - or outright dishonest. A lot like how people said that New York "subsidized" Amazon's NYC offices with $3 billion dollars. Many people thought that their tax dollars were being taken and given to Amazon, when in reality this was the government agreeing to give Amazon a favorable tax rate for a set amount of time.

When you're right, there's no need to stretch the truth.

Reply to your comment below, HN is not letting me respond:

> Amazon would have used city services without paying for them. Who pays for these services? The people, with their tax dollars..

No, Amazon still would have paid taxes - an estimated $25 billion in taxes over the next 5 years. This is the same erroneous thinking as people who think that they're gaming the system by buying stuff on Steam summer sales. You're not actually getting any money, the company is generating greater sales by offering customers a better deal.

> A partial truth is often the best lie.

But not when people are smart enough to see that your truth is incomplete. And while some people may fall for the conflation of externalities with subsidies, people with power and influence are less likely to do so and when they spot this ruse they're going to be even more adverse to whatever point you were trying to make because you've demonstrated as willingness to tell mistruths.

Amazon would have used city services without paying for them. Who pays for these services? The people, with their tax dollars..

A partial truth is often the best lie.

Makes sense, but are they also counting the externalities of solar and wind as subsidies? Sure, they aren't as much as for fossil fuels, but there ARE externalities for solar cell manufacturing.

I see this missing all the time. I don't know if it matters if the real costs of green power are counted - maybe it doesn't change the bottom line. But it seems like the general approach is that green power has no negative effects. The evil one is fossil fuels and it is all evil and the good one is green energy and it is all good. I think it makes it easier to swallow for the mainstream.

If I annoy 3 of my neighbors so much that they would pay 1000 dollars per year to have me disappear, but the government allows me to exist, or he government isn’t giving me a 3000 dollar subsidy, are they?

If it’s part of a money making business that you own, why not?

This is not a subsidy - in particular no entity can exchange this subsidy for a different one in current period when calculating an economic decision.

There are certain tax breaks for gas in us, govt could take those same $ and subsidize something else. That’s a subsidy.

Is this the kind of thinking climate science overall is built on? Very worrying if so

Stop! Stop! You're breathing my air!

That kind of thinking leads to a Logan's Run scenario. Instead, why not think of it as a part of life and work to find a solution that doesn't require the wholesale curtailment of liberties all in the name of the environment?

The liberty to dump your garbage in a community asset?

I mean, how is it considered rude to fart in someone's face but not rude to idle in front of their house?

Silly reactionary hyperbole.

Our peaceful and sustainable coexistence with the rest of the world (natural or otherwise) has always required the curtailment of some liberties.

You cannot sell tubercular beef and poison the population. For the same reason, you cannot submerge island nations and cause droughts that make other regions of the world inhabitable. Deal with it.

>> For the same reason, you cannot submerge island nations

out of curiosity, what island nations have been submerged ?

Tuvalu is a WIP

https://www.thoughtco.com/geography-and-history-of-tuvalu-14...

That's just off the top of my head

from Nature, " Results highlight a net increase in land area in Tuvalu of 73.5 ha (2.9%), despite sea-level rise, and land area increase in eight of nine atolls."

https://www.nature.com/articles/s41467-018-02954-1

> The beaches surrounding the atolls are sinking due to erosion caused by waves and this is exacerbated by rising sea levels.

> In addition, because the sea level is rising on the islands, Tuvaluans must continually deal with their homes flooding, as well as soil salination.

> Soil salination is a problem because it is making it difficult to get clean drinking water and is harming crops as they cannot grow with the saltier water. As a result, the country is becoming more and more dependent on foreign imports.

> Tuvalu has adopted a national plan of action as the observable transformations over the last ten to fifteen years show Tuvaluans that there have been changes to the sea levels. These include sea water bubbling up through the porous coral rock to form pools at high tide and the flooding of low-lying areas including the airport during spring tides and king tides.

Re: land increase

2% is within the margin of error and experts have raised issues about the accuracy of data collected prior to 1993.

Source : http://probeinternational.org/library/wp-content/uploads/201...

It is also understood that growing coral reefs combat sea level rises to an extent, but that this biological mechanism is not infallible.

In any case, the rising sea levels are a matter of fact :

> The 2011 report of the Pacific Climate Change Science Program published by the Australian Government,[297] concludes: "The sea-level rise near Tuvalu measured by satellite altimeters since 1993 is about 5 mm (0.2 in) per year."

Lastly, there is no meaningful difference in this context between a completely submerged island and an island that is in the process of becoming submerged by the sea. You are arguing a moot point.

So it will be a "submerged nation" in about 900 years. Which would explain ... "The threat of climate change to the islands is not a dominant motivation for migration as Tuvaluans appear to prefer to continue living in Tuvalu for reasons of lifestyle, culture and identity."

https://en.wikipedia.org/wiki/Climate_change_in_Tuvalu

I just googled "what island nations have been submerged" and looked at the top six links. They are all about islands that have been submerged, are on the brink of being submerged, or will be submerged soon if recent sea rise trends continue for a very short time.

from the guardian article (first link) ... "The missing islands, ranging in size from 1 to 5 hectares (2.5-12.4 acres) were not inhabited by humans."

Other links were mostly "could","will","may" etc.

Absolutely not. Massive corporations (including many that are state-owned) being allowed to dump MASSIVE amounts of CO2 (etc) into the air that we humans need to breathe completely for free is not anything like the reductionist view of humans breathing air as an externality. For one thing, humans are fed ultimately by photosynthesis, which exactly compensates for the oxygen we breathe and CO2 we exhale.

But fossil fuels, on the other hand, are massive stores of an atmospheric state tens or hundreds of millions of years before humans existed. CO2 levels were so high, the modern human physiology isn't well suited, and your mental state would be as if you were in a stuffy room. The sun even was slightly dimmer at the time, it was so far ago.

And secondly, the amount of oxygen humans need and CO2 we expel is about two orders of magnitude less than that of burning of fossil fuels. To make that comparison is extreme dishonesty.

Requiring companies to pay for the externalities they foist on others is not "wholesale curtailment of liberties." In fact, companies levying those externalities on us without paying for it is stealing, i.e. the wholesale curtailment of the liberty of everyone on the planet. You have it exactly backwards.

That sounds like the slippery slope fallacy. That kind of thinking doesn't necessarily _lead_ anywhere, and even if it did, that doesn't make it wrong. The argument itself is sound.

No one suggested "the wholesale curtailment of liberties". That's a strawman.

There are negative externalities associated with many activities, coal power generation is one of them. The external cost of coal power is at least more than twice the normal market price of the electricity[1]. This is the when you ignore external effects such as those that take place through water, soils, noise, or carbon dioxide and its effect on climate change.

So the actual price is actually at least three times higher. Why not just bill the polluter for the damage they do and then let the market decide which is better based on the true price?

[1] https://www.aeaweb.org/articles?id=10.1257/aer.101.5.1649

But who determines the cost? Who amongst us does not produce CO2?

YOU are the customer if each of these externalities that you are arguing against. Are you willing to shoulder the cost?

That's the whole point is it not? We should each shoulder the appropriate burden of impact in the price of all the goods and services we buy.

If that means some businesses are no longer viable, they go the same way as horse buggy manufacturers. Maybe far fewer will be willing to take international holidays every year. Business will seek more sustainable ways of doing the things we enjoy.

How can a market be expected to function fairly with secret information (an externality)? It's intentionally distorted. Pollution, waste and the rest comes with negligible immediate cost, but far reaching consequences to everyone else's freedoms. If all those externalities are priced in, customers can make informed decisions.

It doesn’t matter if we’re willing to shoulder the cost. We bear it whether or not we want to. The question is whether you want to bear the cost in the form of health and climate effects, or in the form of money.

>But who determines the cost? Who amongst us does not produce CO2?

Courts are responsible for determining fiction from reality. This is true whether we're talking about gunshot murder, or climate damage.

Whether you produce CO2 is irrelevant to truth or fiction.

>YOU are the customer if each of these externalities that you are arguing against. Are you willing to shoulder the cost?

You're also the target of the damages. If you think climate change won't absolutely skyrocket food prices, I have a bridge in the Sahara to sell you.

I think carbon emitters should be on the hook to clean up an amount of carbon equivalent to what they emit. There should be nothing controversial about requiring people to clean up after themselves.

The biggest carbon emitter is the individual collective. There's nothing wrong with your concept and I don't think it's controversial at that level, but it sure creates dissension when we try and figure out what exactly "requiring people to clean up after themselves" means...

Can I dump my trash on your lawn?

Curtailment of liberty: Why am I not allowed to take a shit on a lawn in the park? Why not think of it as a part of life?

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