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Fossil Fuel Industry Needs the U.S. Government

It has been long argued against regulating Fossil Fuel production for the climate’s sake. Conservatives have been claiming that doing this would interfere with the holy free market. A new study shows a total fairy tale because the invisible hand is not responsible for dirty fuel market dominance. The subsidies total up to billions each year is what the findings show.

The Fossil Fuel companies get direct subsidies from the government. Per year the estimates go from $10 billion to $52 billion. Many insidious indirect subsidies also help to keep fossil fuel companies in the business. This allows the companies to avoid paying the true price for polluting and the other dangers they create for society.

A Yale University economist and the author of the study, Matthew Kotchen, said, “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.” On Monday, the paper published in the Proceedings of the National Academy of Sciences examined the value of the government’s support for U.S. Coal, gasoline, natural gas, gasoline, and diesel companies.

In particular, the paper looks at the detrimental impacts the firms offload onto society, specifically climate damages and public health impacts from pollution. For gas and diesel, Kotchen also overlooked the costs of car accident fatalities, road damages from usage of heavy vehicles, congestion-based travel delays, etc.

Kotchen said, “When there’s an externality, you don’t have a free market. People think it’s a free market because it’s just the way it is and there’s no regulation.”

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