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Ronald Steenblik@ronsteenblik.bsky.social |
212 followers 125 following 962 posts
Retired OECD but still active policy wonk. I post on trade, the environment, and energy, especially fossil fuel subsidies. Supporting QUNO's work on identifying and reigning in subsidies to plastics. Once told by Mel Brooks: "You have no taste!"
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Ronald Steenblik
@ronsteenblik.bsky.social
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The implications are that, eliminating those “subsidies” means raising fossil-fuel prices in OPEC+ countries, and applying substantially higher excise or carbon taxes on fossil fuels and electricity in almost all countries. Good idea for reducing emissions; very hard to do politically.
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Ronald Steenblik
@ronsteenblik.bsky.social
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All but $0.05 trillion of that number are on the consumption side, and “only” $1.3 trillion were actual subsidies, in the form of government regulated prices in mainly OPEC+ countries. The rest represent the value of under-priced consumption-related externalities.
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Ronald Steenblik
@ronsteenblik.bsky.social
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A meme in the making!
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Ronald Steenblik
@ronsteenblik.bsky.social
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Dysbiosis: “a shift or change in the composition of the microbiome. This change can be induced by a variety of factors, including diet, antibiotics and infection. When dysbiosis occurs, a disruption in the homeostatic state can potentiate growth and invasion of pathogenic species.”
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Ronald Steenblik
@ronsteenblik.bsky.social
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This idea wasn’t on my bingo card. Thank you for bringing our attention to it!
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Ronald Steenblik
@ronsteenblik.bsky.social
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...fuel industry" but rather to consumers of fossil fuels. The IMF numbers can be thought of as the additional amount, globally, that the IMF reckons the world's consumers should be paying in the form of higher prices and carbon and pollution taxes on the fuels and electricity they consume annually.
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Ronald Steenblik
@ronsteenblik.bsky.social
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... in any of the internationally agreed definitions (UN, WTO) nor any national ones of which I am aware. The confusion the IMF has caused by conflating externalities with actual subsidies has been immense. Besides, my other point is that the IMF numbers do not relate to subsidies to the "fossil...
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Ronald Steenblik
@ronsteenblik.bsky.social
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I think you need to Google my name and "subsidies"! A large part of my career, at the international level, has been spent on identifying, quantifying and analyzing subsidies. The IMF is the only inter-governmental organization that rebrands externalities as subsidies. They are not included ...
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Ronald Steenblik
@ronsteenblik.bsky.social
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Please examine the IMF's spreadsheet:
www.imf.org/-/media/File...
These are not "subsidies for the ... fossil fuel industry" (except for $0.05 trln). About $1.3 trln were subsidies to FF consumers, and the rest is the value of underpriced, consumption-related externalities, not "subsidies".
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Ronald Steenblik
@ronsteenblik.bsky.social
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Better is to read the IMF's spreadsheet, in detail.
www.imf.org/-/media/File...
Only $0.05 trillion of what IMF reports are subsidies to producers. Some $1.3 trln in 2022 are global subsidies to consumers. The rest ($5.7 trln) are under-priced consumption-related externalities, not "subsidies".
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Ronald Steenblik
@ronsteenblik.bsky.social
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For several yrs now Dems have sponsored bills that would phase out federal (only) tax breaks to oil & gas producers, but: (a) the amounts tend to be in the $10-17 billion a year range; and (b) neither party proposes increasing the federal excise taxes on gasoline & diesel, last raised in 1993.
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Ronald Steenblik
@ronsteenblik.bsky.social
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I wonder how much the respondents in the Gulf States and other producing countries realize that their governments keep domestic fossil fuel prices well below export parity, and whether they understand that phasing out fossil fuel subsidies in their cases means substantially raising retail prices.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Well, a bit of progress: As Heather Clancey writes, "Amazon has replaced single-use #plastic air pillows with recycled paper in 95% of its delivery boxes in N. America. A full switch is planned by the 2024 holiday retail season. #plasticpackaging
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Ronald Steenblik
@ronsteenblik.bsky.social
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One 👍🏼 up at least for warning consumers.
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Ronald Steenblik
@ronsteenblik.bsky.social
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“Paper” cup on a French train, with a warning not to discard it except in a recycling bin (for eventual incineration) because it contains #plastic (likely the inner lining).
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Ronald Steenblik
@ronsteenblik.bsky.social
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He seems to understand the environment only in terms of jobs, not values or health.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Also “dirty dogs” and “cat burglars”.
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Ronald Steenblik
@ronsteenblik.bsky.social
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… charges just about everywhere. I mention all this bc many people are confused by the IMF estimates and think that they represent cash payments — in an amount equivalent to 3x annual global military expenditure — to fossil fuel producers that simply can be repurposed to support renewable energy.
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Ronald Steenblik
@ronsteenblik.bsky.social
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So, in other words, “scaling back” $7 trillion in fossil fuel subsidies, using the confusing IMF terminology, means: • Substantially raising domestic prices for fuels and electricity in OPEC+ countries, and former exporters, like Indonesia. • Levying very high carbon, pollution, and congestion …
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Ronald Steenblik
@ronsteenblik.bsky.social
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Note: $1.2 trln of the $5.7 trln in externalities are "vehicle externalities", such as those related to traffic congestion and accidents. They would be at least that large if all vehicles on the world's roads were powered by batteries recharged with solar power. They are not specific to petroleum.
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Ronald Steenblik
@ronsteenblik.bsky.social
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I hope you realise that $5.7 trillion of that $7 trillion are not "subsidies" by any standard definition of the term, but consumption-related externalities. The actual subsidies DID increase, but to $1.3 trillion (from around $0.7 trillion in 2021).
See: www.imf.org/-/media/File...
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Ronald Steenblik
@ronsteenblik.bsky.social
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I chaired the G20 peer reviews of its members' FF subsidy reform efforts between 2016 and 2018. Our reports from 2017 of Germany and Mexico (see link) show our frustration with getting clarity and consistency from G20 members as to what they actually meant by the term.
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Ronald Steenblik
@ronsteenblik.bsky.social
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"Inefficient" then got incorporated into the APEC Leaders' 2009 pledge (albeit retroactively), the G7's 2016 pledge, SDG Target 12.c, and the UNFCCC's commitments.
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Ronald Steenblik
@ronsteenblik.bsky.social
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The qualifier, "inefficient" goes back to the G20 Leaders' declaration at the Pittsburgh Summit in September 2009. It was inserted, among other reasons, to allow targeted subsidies to low-income households (such as the LIHEAP in the USA), and subsidies to help coal mines close down in the EU.
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Ronald Steenblik
@ronsteenblik.bsky.social
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There are 2025 reasons at least.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Unfortunately, an ever-increasing component of that dust in the future will be microplastics and nanoplastics.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Great article. Only cavils r that I disagree that subsidies to "green" technologies internalise externalities — at best they slow the creation of new externalities — and I'd point out that the IMF fossil-fuel subsidy team's use of "explicit" & "implicit" subsidies is non-standard, peculiar to them.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Great article, with a wonderfully sarcastic summing up of the sorry state of multilateral subsidy disciplines. Glad to see a ... oops, THE ... leading int. trade journalist critiquing the IMF's estimates of "fossil-fuel subsidies" and the misinterpretation & misrepresentation of said estimates.
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Ronald Steenblik
@ronsteenblik.bsky.social
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It means the United States is exporting more oil (and LNG) to the rest of the world.
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Ronald Steenblik
@ronsteenblik.bsky.social
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There are trains from Vienna, though Bratislava's train station is on the south side of the Danube, not so near the city's old centre. Also the Flix Bus.
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Ronald Steenblik
@ronsteenblik.bsky.social
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My wife’s mother’s parents (both sides) emigrated from the area west of the “Small Carpathian” mountains—about an hour north of Bratislava—during the early 1900s, so we spent several days there. EVERYTHING revolves around the Church, so no surprise to learn that Pope John Paul II visited the area.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Have you ever been there? Our first time. The public transport system in Bratislava is very good for a city its size (450,000). There are daily, weekly, monthly & annual tickets, of course, but a ticket valid for 30 minutes’ use of the system costs just € 0.55. The beer is EXCELLENT, & very cheap.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Why does the WTO on its website say there have been 48 instruments of acceptance? Because the EU was depositing one on behalf of 27 WTO members?
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Ronald Steenblik
@ronsteenblik.bsky.social
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We’ve just spent 8 days in Slovakia. Sunny or partly sunny almost every day.
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Ronald Steenblik
@ronsteenblik.bsky.social
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“… and major consumers” (not just producers).
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Ronald Steenblik
@ronsteenblik.bsky.social
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… by ~$4.5 trillion. A large part of the additional revenues to governments would be needed, though, to help assist poor households adversely affected by the fuel price rises, and to provide them with access to cleaner sources of energy.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Alternative message: (1) eliminate subsidies to fossil fuel production, perhaps $100 billion/yr worldwide; (2) raise FF prices in countries currently selling FFs at below export export parity prices, $700–1200 billion/yr; and (3) increase carbon and pollution taxes in most countries, …
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Ronald Steenblik
@ronsteenblik.bsky.social
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… such as those related to traffic congestion and accidents. They are independent of the energy used to power vehicles and would be just as large if all vehicles on the road were EVs recharged with solar panels.
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Ronald Steenblik
@ronsteenblik.bsky.social
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The FT should do better fact-checking. The bulk of the IMF’s $7 trillion estimate of “fossil fuel subsidies” represents neither investment nor government expenditure on fossil fuels, unlike the other categories. $5.7 trillion are externalities, and of those, $1.2 trillion are vehicle externalities …
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Ronald Steenblik
@ronsteenblik.bsky.social
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More to what Aigars Marhinovs wrote: “without those subsidies the rest of the economy would grind to a standstill and loose far more in value.” The actual subsidies that the IMF reports for countries like the UK and the USA are small. Almost all the numbers refer to externalities.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Do either of you understand what the IMF numbers actually represent? The IMF has sown enormous confusion by calling externalities “implicit subsidies” and by attributing “vehicle externalities”, such as traffic congestion, to fuels (they would me just as large for EVs).
bsky.app/profile/rons...
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Ronald Steenblik
@ronsteenblik.bsky.social
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The anger, if you understood the IMF numbers, would need to be directed at OPEC+ countries charging their domestic consumers below world market prices for fuels, and almost all governments for not taxing their citizens enough for the fuel they consume.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Suggest you actually look at the IMF’s spreadsheet. In trillions: • Total production subsidies, including to coal: $0.05 • Price support for consumers (mainly in FF exporting countries): $1.3 • “Vehicle externalities” related to driving: $1.2 • Externalities related to combustion: $4.5
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Ronald Steenblik
@ronsteenblik.bsky.social
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The latest episode of the Plastisphere podcast has just dropped, and the topic is (drumroll) … subsidies to plastics!
Hosted & produced by the brilliant @anjakrieger.bsky.social, it’s an interview with Dr. Alexandra Harrington, my colleague Andrés Naranjo, and yours truly. Just in time for #INC4 !
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Ronald Steenblik
@ronsteenblik.bsky.social
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2️⃣ The article stresses that "the exact potential revenue for each tax option [see screen shot] will be worked out through a rigorous research, consultation and analysis phase." They estimate that up to $44 billion could be raised annually from #fossilfuelsubsidy reforms alone.
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Ronald Steenblik
@ronsteenblik.bsky.social
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1️⃣ Nice scoop from Phillip Isakpa on tomorrow's (17 April) meeting of the International Tax Task Force (ITTF), in Washington, DC. The ITTF seeks to raise funds via new taxes and fossil fuel subsidy reform to help poorer countries meet their climate commitments. 🌎
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Ronald Steenblik
@ronsteenblik.bsky.social
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Yes. But let's not confuse profits with prices. Naturally, as world prices rise, so do companies' profits. Ideally, the income tax & royalty system would be better at capturing more of the rent, but the companies have had more than a century to shape the tax system into one that works best for them.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Not necessarily. The oil companies charge world market prices (export or import parity). What this change does is makes producing from Federal lands a bit less profitable for them.
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Ronald Steenblik
@ronsteenblik.bsky.social
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Like in France. The U.S. tax system is truly Byzantine.
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Ronald Steenblik
@ronsteenblik.bsky.social
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That’s not what the IMF data show. Their data list $0.05 trillion in producer subsidies, but $1.3 trillion in consumer subsidies, mainly in the form of price support. The rest, $5.7 trillion, are not subsidies but under-taxed externalities, all related to the consumption of fossil fuels.
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