No subsidies for oil and coal corporations truly exist
The frequently debated removal of subsidies for oil and coal corporations to discourage fossil fuel use is problematic for a straightforward reason: these subsidies, in reality, do not exist.
What are these supposed subsidies? Some obscure calculations by IMF officials estimate subsidies at 6.5% of GDP by factoring in the environmental impacts of hydrocarbons consumed by the public. Other questionable studies mix unrelated data and conclude that oil and coal corporations receive enormous subsidies.
Should we make the oil and coal industries pay for our pollution or repay these so-called subsidies? In truth, this debate over subsidies serves as a pretext for raising taxes. Eliminating these dubious subsidies is effectively the same as increasing taxes.
Eliminating these so-called “huge” subsidies would force oil and coal corporations to raise prices to maintain profitability, likely passing the additional costs on to consumers. If price ceilings are imposed alongside the removal of subsidies, these industries could face bankruptcy, resulting in significant disruptions due to shortages of coal and gasoline, which are critical for essential services such as food distribution and electricity supply.