Conservatives have long argued against regulating fossil fuel production for the climate’s sake, claiming that doing so would interfere with the holy free market. A new study shows that’s a total fairy tale because the invisible hand isn’t responsible for dirty fuels’ market dominance—implicit government subsidies are. The findings show those subsidies total in the billions each year.
We often talk about the direct subsidies fossil fuel companies get from the government. Estimates range anywhere from $10 billion to $52 billion per year. But more insidious indirect subsidies also help keep fossil fuel companies in business, allowing companies to avoid paying the true price for their pollution and the other dangers they pose to society.
“We’re in a state of the world now where we have we call, in economics, inefficient pricing because the price that we pay for fossil fuels does not reflect all those costs,” Matthew Kotchen, an economist at Yale University and author of the study, said. Continue reading.