Nate discusses the controversy surrounding fossil fuel subsidies, including implicit subsidies and their impact on poor communities. He explores the allocation and impact of these subsidies, emphasizing the economic benefits of fossil fuels. The chapter also explores the ownership of fossil reserves and the future of fossil subsidies.
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Quick takeaways
Fossil fuel subsidies are often misunderstood and appear to benefit everyone, but they are mostly externalities and directed towards poor consumers in certain countries.
Transitioning away from fossil fuels is crucial to protect the environment and biosphere.
Deep dives
The Nord Stream pipeline and the Russia-Ukraine NATO predicament
The podcast discusses an article in Der Spiegel that suggests the Ukrainians, with backing from the West, were involved in the Nord Stream pipeline incident. The speaker expresses concern over the potential escalation of tensions between Russia, Ukraine, and NATO in the coming months.
The misconceptions around fossil fuel subsidies
The speaker addresses the claim made by the International Energy Agency (IEA) and the International Monetary Fund (IMF) that 14% of global GDP is subsidies to fossil energy companies. The speaker argues that the majority of these subsidies are actually externalities and the rest are primarily directed towards poor consumers in countries like Venezuela and Iran. The speaker emphasizes the importance of including environmental costs in the prices of consumption and decisions, as well as the depletion externality. The speaker also highlights the significant societal subsidy provided by fossil fuels and the need to transition away from them to protect the biosphere.
In this week’s Frankly, Nate reacts to recent analysis by the International Monetary Fund (IMF) critical of 2022 subsidies to fossil fuel. These subsidies - by IMF math totalling $7+ trillion - are not what they seem, resulting in widespread confusion on what is really going on. By peeling back the layers of the onion on these oft-misunderstood benefits - Nate outlines what comprises these fossil fuel subsidies, who receives them, the purpose they serve, and who benefits from them (spoiler alert - we ALL do). How do these subsidies fit into the larger story of the huge energy surplus that fossil fuels have provided? What will it mean for societies when the subsidy that is fossil fuels goes away? Will we be prepared when the externalities - paid for in these subsidies - catch up with us and we need to learn to live with the aftermath of the Carbon Pulse?
To Watch on Youtube: https://youtu.be/DpcjHqXYrFs
For Show Notes and More: https://www.thegreatsimplification.com/frankly-original/43-fossil-energy-subsidies-the-bottom-line
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