“Fossil fuels subsidies” as described in the media for the most part don’t exist – are governments really willing to build policy on a fictitious concept?
Anyone that likes discussing politics knows that, like religion, some topics only work in the echo chamber. There is no point in sitting down with someone at the other end of the spectrum for a conversation, although the practice has for decades added a spice to extended family gatherings that no cook could hold a candle to. As our society gets more and more polarized, the potential for fireworks grows in lockstep. Try sitting down at a holiday turkey dinner and singing the praises of the elected president of the United States, if you don’t believe me.
On the other hand, we do have a right to expect that sheer numerical bullshit that finds its way into the news will be challenged and retracted. Math is math. One should be expected to be called out and held accountable for saying that, for example, there are 5.3 trillion dogs on earth.
But sometimes all the openness and fact-monitoring services provided by legions of caring people are not enough to dislodge from what-should-be capable brains certain statistics and facts that are brazenly untrue.
The subject of fossil fuel subsidies is just such a beast. What’s significant about this topic is that several of Canada’s leading political parties, actually a majority of them, plan to take “funds” from “fossil fuel subsidies” to pay for real programs. These staggeringly clueless plans would be amusing except that they might actually believe that this is possible.
As a recap, the IMF claims that there were some $5.3 trillion in fossil fuel subsidies granted in the world in 2015. I won’t get into the weeds of it; a gentleman named Blair King has done a far better job than I ever could because of a capacity of patience and tact that I sorely lack. I will borrow from his excellent work though to flag a few things.
First, the components of the “fossil fuel subsidies” label are not just questionable, they are blindingly brainless (there’s that tact issue I was talking about). Per the IMF (via Blair’s blog), Canada had a total of $46 billion on fossil fuel subsidies in 2015. The amount consists of:
- Pre-Tax subsidies – $1.4 billion – 3% of IMF total
- Global Warming – $17.20 billion – 37.4% of IMF total
- Local air pollution – $6.05 billion – 13.1% of IMF total
- Congestion – $14.89 billion – 32.4% of IMF total
- Accidents – $2.08 billion – 4.5% of IMF total
- Road Damage – $0.88 billion – 1.9% of IMF total
- Foregone Consumption Tax Revenue – $3.53 billion – 7.7% of IMF total
The first component, Pre-Tax subsidies, is the only real one. It primarily consists of accelerated write off of capital investments, such as when Trudeau extended the first year write off for Canadian Development Expenses in oil and gas from 30% in the first year to 45%. Now that is a real tax benefit that is given to oil/gas producers, but the subsidy is only the difference between what that write-off rate is and what it “should” be, since every business is allowed to write off capital expenditures from taxes. So we’ll leave it to the economic geniuses in the political parties to determine what the fair rate “should” be.
The rest is pure gibberish. Here is the definition from the IMF (again courtesy of Blair) of “fossil fuel subsidies for Congestion”:
Traffic congestion costs imposed by one driver on other vehicle occupants are approximated by using a city-level database to estimate relationships between travel delays and various transportation indicators and extrapolating the results using country-level measures of those same indicators. Travel delays are monetized using evidence about the relationship between wages and how people value travel time. Accident costs are estimated based on country-level fatality data and assumptions about which types of risks drivers themselves might take into account versus those they do not, and extrapolations of various other costs, such as those for medical expenses, property damage, and nonfatal injury.
Now, pay attention everyone, this is important: people proposing to govern our mighty country are proposing to pay for part of it by reducing “traffic congestion costs imposed by one driver on other vehicle occupants” or by squeezing money out of someone for “travel delays” that are “monetized using evidence about the relationship between wages and how people value travel time.”
To all you Canadian politicians running for office, and those involved in this sordid process, the country desperately needs you to try with all your might to understand the vacuousness of this concept, created by the likes of the IMF and cunningly promoted by climate activist organizations. Ninety-five percent of the concept is not real and will not under any circumstances help you balance any budget.
Should you get elected, you will with one hundred percent certainty look like complete fools when you are forced to explain to a nation and the world how duped you were, that eliminating expenditures that are not real did not help with anything. The activist organizations that put you up to it will not be at your side taking the blame; they will be biting your ankles for not doing more to save the planet.
It is in your own self-interest to try to learn about the fallacious concept of huge fossil fuel subsidies while you still have a chance.
Get Christmas shopping done early! Even those ungrateful kids will be happy with a copy of “The End of Fossil Fuel Insanity” available at Amazon.ca, Indigo.ca, or Amazon.com. It may well be the best decision you will ever make!
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