Fossil fuel companies impose more in climate costs than they make in profits
by David Roberts
It is fairly well understood by now that releasing carbon dioxide and other greenhouse gases into the atmosphere imposes an economic cost, in the form of climate change impacts. In most cases, however, those responsible for carbon emissions are not required to pay that cost. Instead, it's borne mainly by the world's poor and low-lying countries, and of course by future generations, as many of the worst impacts of climate change will emerge years after the emissions that drive them.
People sometimes refer to the unpaid cost of carbon pollution as a subsidy, or an "implicit subsidy," to polluting businesses. The IMF recently issued a report saying that total worldwide subsidies to energy, mainly fossil fuel energy, amounted to $5.2 trillion a year. The reason that number is so high is that the IMF includes implicit subsidies — the social costs imposed by businesses (including climate damages) that they don't have to pay for.
Vox's Brad Plumer raised some questions about whether that's a misleading use of the term "subsidy." Whatever you call it, though, it makes for an unsustainable situation, literally. It can't go on.
As climate change gets worse and the chance to avoid harsh impacts dwindles, governments are getting serious about putting some sort of price on carbon emissions, whether explicit (a tax) or implicit (regulations). By next year, a quarter of the world's carbon emissions will be priced in some way. Businesses that now emit carbon pollution for free (or cheap) will soon see their costs rise.
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http://www.vox.com/2015/7/24/9035803/fossil-fuel-companies-cost-of-carbon
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