Peter Foster: Fuzzifying ­fossil subsidies

Peter Foster: Fuzzifying ­fossil subsidies
Oil and gas will beat green energy with or without subsidies

With green-energy policies proving increasingly costly and destructive, the attack on alleged fossil-fuel subsidies has been given a new slant: Now it’s all about confronting the global economic crisis.

On Tuesday, the International Energy Agency and the Organization for Economic Co-operation and Development held a joint press conference to launch a rambling document that provides an “Inventory” of some 250 different “mechanisms” of fossil fuel subsidy. Significantly, yesterday also saw the publication of a paper by Ken McKenzie and Jack Mintz for the University of Calgary’s School of Public Policy that points out that fossil fuel subsidy analysis tends to be muddled.

Messrs. McKenzie and Mintz’s The Tricky Art of Measuring Fossil Fuel Subsidies is aimed not primarily at the OECD/IEA but at analysis such as that of a 2010 report conducted for the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development, IISD, a Canadian node of the climate agenda.

Getting thinking straight on subsidies is important because they tend to be intensely political. For example, the GSI report seemed to support the condemnation by Ontario Premier Dalton McGuinty, and the late federal NDP leader Jack Layton, of hundreds of millions, or even billions, in subsidies going to the Canadian oil and gas industry.

The bottom line of Messrs. McKenzie and Mintz is that “oil and gas industries are not subsidized in aggregate once negative tax expenditures, not just positive ones, are taken into consideration.” (Financial Post)

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