Canada’s fossil fuel subsidies amount to $1,650 per Canadian | Hacker News Reader

Canada’s fossil fuel subsidies amount to $1,650 per Canadian

thenarwhal.ca

133 pointsreddotX32 comments

To be clear, this is treating externalities like carbon emissions as a subsidy - IE we should have a massive carbon tax to internalize it. Which from an economics standpoint makes perfect sense, but is not what most readers would consider a "subsidy" and so is a bit of a dishonest presentation.

I agree with the conclusions, but I think presenting it that way tends to only embolden the do-nothing anti-climate-action critics.

It's a very dishonest way of framing it. The entire article makes it sound like they're talking about actual payment to wealthy fossil fuel companies that could be paid to actual Canadians instead and would make them $1,650 a year better off.

Not exactly. Framed the way you do it doesn’t mean i’m $1650 better off, it means government is hiding the real cost of my consumption and encouraging me to use fossil fuels.

I’d rather bare the cost, and be able to realize the financial benefits of reducing my carbon footprint.

pretty much how all politicians operate when they want something and how they get their message out through what we assume are reputable sources. They on the sounds plausible or I already agree with that type of wording to eventually turn us to what they want us to believe and get behind.

however this article gives that up instantly and even warned us up front "Opinion" is the clear label and that means when reading you must come in with the understanding, all bets are off, what you are about to read may or may not be true and it is up to you to do your due diligence. Sadly most people won't if they agree with any of the premise of an article.

> that could be paid to actual Canadians instead and would make them $1,650 a year better off.

This much sounds like it is true. They could tax the fossil fuel companies and redistribute it to Canadians (which is in fact how the carbon tax works, except it's not that high).

Is it truly dishonest though? Are all subsidies cash handouts?

There are eg environmental and health costs paid due to fossil fuel usage. These costs are paid (in Canada) by taxpayers via the govt since FF producers don’t pay them.

Certainly seems like a subsidy to me.

Are all subsidies cash handouts?

Yes. That is the definition [1]:

    subsidy noun
    sub· si· dy | \ ˈsəb-sə-dē  , -zə-\
    plural subsidies
    Definition of subsidy
    : 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

[1] https://www.merriam-webster.com/dictionary/subsidy

Point c could be used to include what's talked about in the article. The subsidy doesn't require to be received by oil industry to be deemed oil subsidy, like in the case of Ocean Protection Program.

No. If you allowed this then you could say that funding hospitals subsidizes tobacco companies, murderers, etc.

Funding women's shelters is subsidizing the abuse of women!

It's politicized equivocation.

Funding provided to hospitals to extend the lives of smokers with lung cancer, either implicitly or explicitly, who end up smoking more, would be subsidizing tobacco companies.

I'm fairly sure funding women's shelters is the opposite since victims of domestic violence can go to shelters to avoid abuse. But if it turns out there's a direct link between something like alcohol consumption and domestic abuse, you could posit that subsidizing alcohol in some way also subsidizes domestic violence.

That is the simplistic definition, not even the full OED or Webster's entry, rather than the accepted one in economics and by the international community.

WTO definition of subsidies includes "government revenue that is otherwise due, foregone or not collected (e.g. fiscal incentives such as tax credits)". Pdf: http://www.wto.org/english/docs_e/legal_e/24-scm.pdf

The EU considered the UK's reduction in fuel tax as a subsidy.

Yes, it's dishonest. If you know that a large portion of readers understand X, when actually it's Y, then you are knowingly misleading them.

Agreed, if you want to play this game, you might as well say that Canada is subsidizing criminals because of crime's unpaid externality. Total cost of crime is on the order of $100 billion in Canada[1], which comes to $2,700/citizen.

Are you ready to say that Canada is subsidizing criminals, and when you force them to work off their cost of crime, you're just removing a subsidy for harmful behavior? No? Then don't be so loose with terminology. [2]

[1] https://www.justice.gc.ca/eng/rp-pr/csj-sjc/crime/rr10_5/rr1...

[2] Previous comment/thread on the matter of using the term "subsidy" consistently: https://news.ycombinator.com/item?id=21018166

Curious about this question of direct subsidies, will re-read the IMF report and see if they break these categories out.

IMF report summary:

- $5.3T global subsidy in 2015

- 6% growth per year between 2011 and 2015

- 6.5% of world GDP (2015), 6.4% (2013)

- 24 countries have a subsidy >10% of their own GDP (including China, India, Russia)

- Highest by percentage of GDP is Ukraine, 60.73% of GDP

Source: IMF “Counting the Cost of Energy Subsidies” (2015)

https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Glo...

Agreed. A balanced and sober study would include the tax benefit from energy companies to Canadians as well as employee income.

A few of the points mentioned (eg. guarantees and interest payments for the pipeline, or paying to prepare the harbour for increased oil tanker traffic) are pretty direct subsidies though.

the narwhal is very well known for its liberal bias, even to the point of dishonesty, so this presentation is not surprising.

> but I think presenting it that way tends to only embolden the do-nothing anti-climate-action critics.

Not to mention that $1,650 is a very small amount to pay for this.

I pay at least an order of magnitude as much in actual costs for energy.

Why do people think the only way to get action on something important to them is to lie and inflate it?

I read halfway through and couldn't tell if the subsidies were thinks like tax breaks that _every_ company gets, vs tax breaks that they get _specifically for being fossil fuels_. I consider this distinction to be important, so I stopped reading.

...but it wouldn't be a "massive" tax. Do the math, 15,000 miles / 25 mpg = 600 gallons of fuel, which is $2.75/gallon. But much of the carbon produced by a typical westerner is from fuel used for heating, electricity, or manufacturing goods, so the actual figure necessary to balance out would be even less when spread over more than just transportation.

To be honest, I think that the "subsidy" is a made up number that would be unaffected by a different price of fuel, but if you take the idea and rhetoric of externalities seriously, then simple arithmetic diminishes the cost of global warming to insignificance. Not based on deniers' arguments or facts, but taking the figures of those who are concerned at face value. I remember getting much the same result from the National Resources Defense Council's estimate of climate change costs in a few decades.

Better to say the "externalities" are "infinite" than let slip that they are only a couple bucks a gallon. Prices of fuel vary by several dollars a gallon from country to country, so if the cost was in that range, some countries might well be paying it already...if not now, back when the price of oil was especially high...if anyone was serious about their arguments and numbers.

...and if you try to argue with me what the size is of the externalities, you're missing the point. I don't know, I only wish people would mean something when they talk about the topic.

> Finally, there is the $60 billion subsidy that the IMF focused on — the “social costs” of carbon that governments pay, instead of fuel producers.

So it's not a direct financial contribution by the government.

This viewpoint was hotly debated in another recent thread:

https://news.ycombinator.com/item?id=19905104

I wonder how the IMF would classify the amount of money the USA spends on military protection of the shipping lanes (to protect oil shipments) around the Middle East...

From the study cited:

> The paper updates estimates of fossil fuel subsidies, defined as fuel consumption times the gap between existing and efficient prices (i.e., prices warranted by supply costs, environmental costs, and revenue considerations),

It's not necessarily a direct transfer subsidy or even lower tax rate for certain industries. So you can take that for what its worth

If you want to talk about actual dollars in tax reductions or subsidies for fossil fuels in Canada perhaps this link would be of better use:

https://www.iisd.org/faq/unpacking-canadas-fossil-fuel-subsi...

Interestingly there has been proposals to build Nuclear to deal with SAGD drilling in the north. I've heard (no specific source) that 1 barrel is used in extraction for every 3 produced. Electricity could enter the grid and the waste heat/steam could assist Tar sand extraction and refinement processes.

But environmentalists protest Nuclear too.

Nuclear has a PR problem just like airplanes because of how high profile the failures are (and to be honest, most nuclear plants are using 1960s tech). People are often irrational, like worrying about their flight while driving to the airport.

TerraPower is pretty interesting... but political setbacks. https://www.popularmechanics.com/science/energy/a25728221/te...

These guys are more interesting to me, but it's not really my area of expertise:

https://flibe-energy.com/news/

https://www.youtube.com/watch?v=0BybPPIMuQQ

The estimate is from 2015 - Trudeau got into Power in Nov. 2015...

At its planned maximum, the carbon tax on Canadians will be $50/tonne. Canada emits 20 tonnes per capita per year, Assuming a naive calculation, that's $1000 per Canadian. So under that model, half the Canadian subsidy will be gone by 2023.

However, this simplification I'm ignores that, to protect businesses Canada has implemented output-based allocations, where the first n-tonnes per unit product of a large business are exempted, meaning that the cleanest and greenest businesses within an industry pay no carbon tax because they're below their output allocation. That prevents them from getting stomped by competitors without carbon pricing, but means a tremendous amount of GHGs in Canada will be going untaxed.

Yeah, we need to get $100 per tonne ASAP, and start forming coalitions with other countries so that we can use tariffs instead of output-based allocations to protect carbon taxed businesses from untaxed competitors.

This is why I think H.R. 763 (in the US) is a well-designed bill. It taxes everything, and has a built-in tariff to serve as incentive to other countries to implement similar carbon taxes. I hope it passes. I believe it starts out at $15 per ton, then goes up by $10 per ton each year, with adjustments based on whether we're falling short of our greenhouse gas reduction goals, or greatly exceeding them.

For reference, Canada's is $20CAD/tonne currently, going up $10/year up to a cap of 50. So the US $15 is about the same to start, but ramping up a bit faster when you figure exchange rate.

Again, it's socialism for the rich and capitalism for the poor.

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