German coal has been heavily subsidized for more than half a century. No one really knows how much money exactly went in there, but it's assumed something like 200-350 billion euros (http://www.foes.de/pdf/Kohlesubventionen_1950_2008.pdf).
From the article: "Wind, solar and other renewable sources, which account for 55 percent of German electricity capacity, are even more subsidized than coal mining, adding about 25 billion euros to power bills last year."
It makes sense to promote renewable energies, as this makes sense both from a social and environmental point of view.
Keeping coal mining on life support makes no sense. In the Ruhr area, the consequences of coal mining will still be felt for a very long time. It is necessary to run pumps for centuries to come so that the toxic mine water does not reach the groundwater level.
The difference is that the subsidies for renewables had the purpose of propping up reshaping the power supply system, are time limited (20 years of life time, rates are locked in when the system is brought up, rates were falling over time) and decentralized (put up a panel on your roof that's connected to the power grid, you're eligible).
In contrast, the coal subsidies propped up a well-established industry with few players, with no end in sight and little oversight (as stated upthread: "No one really knows how much money exactly went in there").
But unhealthy and dying people DO consume a lot of health services. Not to mention the fact that unhealthy levels of pollution can lower the quality of life for a great many citizens, something most people think that governments should care about.
> But unhealthy and dying people DO consume a lot of health services.
Yeah, sure, and I'm not saying something that kills people early always saves health system money. Just that it can (a lot of analysis of cigarette smoking have showed that reducing smoking in many countries has a net public cost, considering the aggregate of health and public pension payments, and I think in some cases that was true of health costs alone.
> Not to mention the fact that unhealthy levels of pollution can lower the quality of life for a great many citizens, something most people think that governments should care about.
Sure, quality of life is another important concern aside from health costs. I'm definitely not saying deadly pollution is a net good, even if it might save public health costs.
It's complex and a calculation that you have to do carefully. To start at the most obvious point: what is the subsidy subsidising? The largest cost item of a coal power plant is in building it and the matching infrastructure, then costs continue mainly as salaries of those running the plant and raw material, disposal, repair, ...
Setting up wind power plants will necessarily also have the building phase as the highest cost, but then direct running costs will be much lower as there's no raw material and much less personnel.
The subsidies that you are looking at currently for coal are essentially spent to avoid the mining operations and coal plants from making a loss.
The subsidies for wind power are primarily to finance new turbines to be built (& infrastructure). But you don't actually subsidise the operations.
In other words, if you look at current wind subsidies they are mainly to add capacity, if you look at coal subsidies they are to ensure the previously built capacity is used/available.
In addition, you have to remember previous subsidies- those of building, renovating, etc the coal mines and plants. If you do count those and calculate them eg per year of lifetime you get much higher amounts of 'real' subsidies, it's just that that money has already been spent.
A big downside of it all though is that Germany lost most (all?) of its wind & solar power manufacturers - so it's buying stuff from China, rather than supporting local industry. That is an element the government urgently needs to address ..
The companies that built solar power generation in 2004 got a guarantee of a certain price for x years, and a guarantee that the people who built in 2005 would get a lower price. IIRC the price decrease was set in advance. In effect a market introduction price, for a limited time. The sums are low/high until the market introduction ends, and the producers knew that as long as they could innovate 10%/year they'd make a profit. (Except that the actual number wasn't 10%.)
The companies that ran coal mines got a subsidy with no defined end-by date, and one cannot by any stretch of the imagination call it "market introduction aid" or "conditional on 10%/year innovation".
The explicit subsidies for coal are one of the reasons why renewable energy sources need subsidies to be able to compete in the market; another reason are the implicit subsidies for coal, i.e., the coal producers not having to price in the the consequences of air pollution and climate change.
So Germany removes 1.1 billion in subsidies, and out of the woodwork containing all the libertarian anti-government spending hawks comes the pro-coal job loss lamentation.
Can the political right please choose: either dump govt handouts across the board for energy or dump the exclusive love of fossil fuel jobs? Meanwhile, renewable energy makes 5-10X more employment opportunities and we hear no complaints about these jobs being affected by government cutbacks by anyone on the right.
Can you decide if you want subsidies or not first?
From the article: "Wind, solar and other renewable sources, which account for 55 percent of German electricity capacity, are even more subsidized than coal mining, adding about 25 billion euros to power bills last year."
Crazy thought here: You can like subsidies for certain industries (e.g. renewable energy subsidies that are supposed to aid a restructuring of the power supply market towards reducing emissions, are time-limited, and decentralized) while disliking subsidies for other industries (e.g. coal mining: a legacy, toxic industry with few people still employed in it)
Never mind, plenty of cheap ex-Soviet nuclear power is still available from their neighbors... and Russian natural gas... and Middle Eastern oil... they surely don’t need energy independence! /s
That’s a strangely editorializing headline. Kinda like “Apple to no longer mine Lithium”. Germany will (and has been) buy coal on the market. It’s easily transported by ship (unlike LNG, and, to some extend, oil), and there are lots of producers in many countries, making dependency a non-issue.
Also: this isn’t really about environmental concerns. Those just weren’t part of the story when this was decided in the 90s, at least not in terms of global warming. Acid rain, and the local trouble with large cities built on top of the mines grappling with more and more geological disturbances were a concern, but the real reasons were simply economics: German coal had become too expensive (around two decades ago). Shutting down it’s heavily-subsidized mining is also consistent with the stated goals of reducing CO_2, because buying on the world market will (slightly) raise prices.
There’s also the minor inaccuracy that Germany will continue mining lignite for a few years, although I guess that’s an acceptable simplification within the constraints of a headline.
The winding down of the coal industry is actually somewhat of a model for such processes. This used to be a hugely influential industry, both in economic powers, as well as cultural. Growing up in the 90s, I remember strikes, protests, and other events around the mining industry and its original boom towns featuring in the news about every second day.
To find compromises that did not satisfy any stakeholders, but succeeded in keeping the peace and, at long last, lead to an environmentally responsible energy strategy was quite a feat.
> this isn’t really about environmental concerns. Those just weren’t part of the story when this was decided in the 90s, at least not in terms of global warming.
Civilization, released in 1991, features global warming whenever the amount of pollution in the world exceeds a threshold. (There's no distinction between one kind of pollution and another, so a common way to produce that much pollution would be detonating nuclear weapons, but coal is definitely implicated too.)
The 90s are when people worried about global warming. According to Google Books Ngram Search, "climate change" overtook "global warming" in 1994, crippling its steep upward trend.
> the government pulled the plug on 1 billion euros ($1.1 billion) in annual subsidies
I know the politics of countries outside the US are quite different, but I'm a huge fan of things like this statement. I truly think the best place for that money is to never leave the taxpayer's pocket.
Having worked in the odd megacorp (and those tend to run the show), "efficient use of resources" isn't the first thing that comes to my mind when it comes to the private sector.
Maybe not. But giving money to those who are too inefficient to compete, even by the standards of the private sector, seems almost certain to be wasteful.
That depends what benefits you get from it. Efficiency is a fraction: cost over benefit. You can't just whine about cost and use the word "efficiency". That's cost, not efficiency, and you're completely ignoring the entire point of money in the first place: to be spent to achieve benefit.
This seems weird, if we're talking about the same definition of efficiency, which I would say is the resources, denominated in money, needed to produce a given result.
So let's say that the government produces one driver's license per $100, and I'm angry that it costs that much. Your proposal is that I will be happy if I instead spend $120 per license?
I have a feeling when someone said "have you been to the dmv" they were talking about the length of time things take, not the monetary costs associated with producing a license.
In that case the GP would be talking about appropriating more money for more DMV employees so that people could be done with their business their more expeditiously.
In your case, you're talking about monetary efficiency which is a different thing and might be better served by less employees serving the people.
And I guess it's up to society to decide where that line should be drawn in terms of both monetary efficiency for the tax payer and temporal efficiency for the person waiting in line.
I agree that when people talk about the DMV, they're most likely talking about the lines. When people talk about government inefficiency in nearly every other context, they're talking about money.
You're right, but that's missing the point. The problem is inefficient code using too much RAM. Instead of fixing the process, the user took out some RAM hoping the code would magically become more efficient when it needed to run with less RAM. Instead the program ran even slower, and the user was somehow surprised by this outcome. Either the user can continue to blame the program and remove even more RAM, or the user can fix the process that was using too much RAM to begin with. In some very misguided cases, the user might even remove RAM and increase CPU power, leading to even more wasted resources and no improvement in program speed.
Far too often the solution is to continue removing RAM in the hopes that the inefficient process magically fixes itself. It rarely does.
The DMV is a great example of efficiency, they're just optimizing for monetary-cost-per-transaction instead of client-time-per-transaction. You could move people through quickly, fill out the forms for them, and provide helpful and polite service, but all that costs money: it's just cheaper to make clients do all the paperwork and have massive lines so you maximize the work you get out of the few DMV workers by never having them sitting with the line empty.
There are certainly ways they could make the DMV more efficient, but don't mistake the almost universal unpleasantness of DMVs for inefficiency.
I've worked in both. And i've got an economics education :P
My experience tells me entity-scale is the main variable that determines efficient use of resources (all other things being equal), rather than private/public sector divide.
Which makes sense if you think about it: once you get away from small groups and sole individuals being able to give all things their attention, a private company has to effectively re-implement a form of government to operate internally.
> entity-scale is the main variable [...] Which makes sense if you think about it
While it may arguably be the main variable, and definitely the main variable within a sector, it shouldn't be used to discount the importance of goals/motivations/incentives. Although there are plenty of examples to the contrary in either direction, I think most also with experience would agree there is more waste and less accountability on one side compared to the other.
Incentives, culture, mechanics, motivations, personalities, beliefs, scope, competition: all of those things play additional parts. And there's good governance and strategy and bad governance and strategy that applies at all those institutions at all levels and size.
I can't really agree with the "more waste and less accountability on one side compared to the other", but that's primarily because the terms/measurements are so poorly defined and they differ so much country to country, state to state and with subject matter, and as I said, I believe that as institutions grow/mature, private industry must implement government anyway.
I guess what i'd rail against most is the idea that its the private/public idea itself that plays the significant part in efficiency and productivity: the idea that subsidising private industry, public-private partnerships, or privatising certain public roles or firms/industries somehow magically, by itself, makes things "more efficient".
If i were to reflect back on my own career, of the three top efficient organizations, two were medium-sized government departments, and the third was a small team non-profit of about 5 on a small government funding arrangement. Worst three were all private industry: big corp, big consultancy, little firm (although, admittedly, funded by government). Private industry had a huge problem with people being motivated by profits, rather than doing the job: hence directly incentivizing a seeking of inefficiency if not in a fully competitive market (which in the real world, is most markets these days, and certainly most markets with players of any scale).
There's a couple of throw-away populist lines I could give about the secret of efficiency I've observed, but i'll chose three: motivation/incentives, devolve responsibility down to the person best able to make the decision, and preference hands off and less work over more (which, to me, is almost the secret success of efficient free-market economies, the ability to just step back and use organic structures to just let things happen).
I worked mostly tiny engineering companies and only for two large companies. Though my dad worked for defense contractors and government his whole career.
The comment about size is spot on. Two things going on.
Management at scale means trying to get 10,000 monkey's pointed mostly in the same direction[1]. There are huge governance issues with that. Private public does not matter[2]. Large organizations without these controls will eventually lose coherence and flame out.
However that mass has a quality of it it's own is in play. 10,000 monkeys can manage extremely large 'streams' of effort and punch way above the weight of the sum of all monkeys. In spite of the lack of efficiency.
[1] If you wonder why management isn't interested in your shiny new idea and wants you to to get back to work, that's why.
[2] If anything your local government is more interested in your complaints than say the cable company.
Let say you're correct, then it's all the more reason __not__ to over-subsidize something. It's one thing for a gov to toss some money at something to encourage R&D, the growth of a technology and/or market, etc. That makes at least some sense in some cases.
The problem is these "temporary" gov programs never end. And then eventually they live long past their prime.
Furthermore, as the become the new normal they tend to create unintended consequence. For example, farm subsidies for corn drove down the price of high fructose corn syrup. That made the sweetener ubiquitous.
Similar can be said for home loans and student loans. Once these programs take on a life of their own, the market becomes distorted and eventually bad - unforeseen - things happen.
In my state (Utah). The government is attempting to roll back solar subsidies because "that industry should stand on it's own two feet". Conveniently neglecting to mention the massive tax breaks to fossil fuels.
I wish everyone competed in a free market (for the most part), but the energy market is not that.
And your comment conveniently omits that ballot item was a non-binding opinion question on using a gas tax increase to fund education and public roads. And that it was defeated. And that a tax != a subsidy.
A tax != a aubsidy. But tax can be, and oftwn is, a means to make taxed-thing-X less appealing.
For example, you can make electric cars more appealing by increaing the tax on gas.
Where things get ugly is when the incentives are in conflict. Again, oil is subsidized and then taxed. Big Oil wins. Gov wins. Consumers - who pay the subsidy and the tax - lose.
Or they support the entire economy in positive ways. Reliable availability and pricing of corn has a tremdous positive impact on the economy as a whole.
Without a strong hand in regulation, dominant companies get fat and lazy, destroying anything in their path. Imagine the potential that would have been lost had the original AT&T not been under the yoke of regulation. The internet and the immense wealth it has created would never had existed. You’d be paying $300/mo for some ISDN style Western Electric modem to access AT&T’s version of AOL.
Look no further than the shitshow that is Facebook and Twitter for what happens when you let the free market run. We’ve brought back white supremacy and god knows what else in pursuit of user engagement.
A lot of that ptivate sector inefficiency is because big companies have the artificially cheap ability to fundraise thanks to access to the public markets.
I saw that as well. But I would think, that if you're going to pick a market to distort then renewables (i.e., the future) makes more sense than keeping coal alive. Also, as the article mentioned, there were political overtones to cutting out coal.
Only if you define "better" as having the lowest price. Free mariets don't magically remove the disconnect between individual interests and collective interests (tragedy of the commons). The economic optimum is not guaranteed to coincide with social, moral, qnd political optimums
Well, I don't define "better" as having the higher price. From the point of view of the economy as a whole, efficient is better than inefficient, because it can produce more outputs for the same inputs. This isn't just abstract - people can use those outputs.
Tragedy of the commons is an issue, but subsidizing a coal mine doesn't seem much like a tragedy of the commons issue to me. It seems more like your last words: a "political optimum", that is, something that produced votes, because the mine owners and workers want the subsidies much more strongly than the taxpayers want to not have to pay. That may be politically optimum, but it's not morally, socially, or economically optimum.
So you disagree with solar energy subsidies, then?
Nations have other motives than economic efficiency. The state should lead the market to meet national goals like clean energy infrastructure.
Coal subsidies are a way to increase military strength, or at least they used to be. War needs steel needs coal. That may no longer be the case with more advanced ways of creating steel without coal.
I deny you the right to put words in my mouth. I also despise the "You said X, so you must support/oppose Y, then" argument schtick.
In a parallel comment (https://news.ycombinator.com/item?id=18736465), I said that giving money to those unable to compete "seems almost certain to be wasteful". I chose those words very carefully. I was thinking about food security rather than steel for war, but I was very deliberately leaving an escape hatch that, yes, sometimes you actually do want the inefficiency for other reasons.
To overgeneralize that subsidies make the "economy as a whole... most people" less better off is to make a false statement. Market efficiency is too narrow a view to constitute coherent policy. In the face of an existential threat, it's inconsequential.
And how much of policy is determined by an existential threat? I would assert: not much. Food/agriculture, defense, energy, but not much else. And therefore as a generalization, yes, "subsidies make the economy as a whole, and most people, less well off" is in fact a reasonable statement.
Would it change if it subsided a policy you liked?
Perhaps not for you, I feel like the augment about "hey we shouldn't subside that" is often tied to if someone likes it or not. But other subsides are ok...
Can be, as many people don't even want to subsidize things that they consider good (I'm often in that camp). But I think the surprise for many people is that good and bad are not the same for others as they are for themselves, especially wrt public funding.
I'd rather see that money go towards paid training for workers like the coal miners in the article, and investment into the renewables industry they would be going into.
That’s actually what happened. The long timeline also allowed them to adapt: everyone trained in mines in the last two decades earned an education that’s transferable to work outside the mines.
There are different aspects in this, some which come to mind:
* Coal is the main local energy source. Other sources have to be imported. Having coal mining gives some degree of independence from Arab Oil, Russian gas and Nigerian Uranium.
* By subsadies over some time the economic change can be controlled to see degree instead of setting free about half a million mine workers, of which many had low qualifications, and a bunch of people in dependent industries free at once. The Ruhr area was fully dependent on coal mines as reason for the area's growth and hand hardly any non-coal related industry.
The government has a duty to promote the general welfare of the country. Stable markets are a big part of that.
The idea of not subsidizing things is attractive, but the people pushing those ideas usually are really rooting for market instability, which benefits them directly at a cost to society.
For example, much of the hoohah behind current US government trade policy is about eliminating domestic competition. In agriculture, for example, small/medium dairy is in the process of being erased.
I was curious about this so I opened google earth, panned over to Germany and zoomed in on a random brown patch on the satellite imagery. The environmental devastation is absolutely awe inspiring. They have mines around the country but particularly south of Berlin, the earth is scarred with dozens of massive active and refilled mines. That group of mines also continues into Czechia and a number of refilled mines can be seen on the Polish border as well.
In North-Rhine Westfalia they do this more or less regularly with the A61 and A44 for Garzweiler II. Only this year they closed down the A61 after rebuilding the A44 to mine more coal after they demolished it a few years before. In 2035 they will rebuild the A61 again.
It's fascinating how (at least in the US) support for coal mining has become a conservative position: you now have people who claim to be staunchly against welfare payments demanding taxpayer money to prop up increasingly unnecessary jobs.
It's the Protestant work ethic, I guess: work is inherently virtuous and deserving of reward even if it serves no purpose, and not working deserves punishment even if there's nothing useful for you to do.
It is vote pandering. The people the GoP actually serves are too few to win anything on their own via democratic vote. Their platform is constructed to appeal to the disenfranchised by singing them a song that never rings true.
You have very well phrased the jist of arguments against basic income that I have heard from relatives. Essentially, that people MUST work to derive value from their life. What would you do if you didn't work? How would you be fulfilled? These are non-ironic questions I have gotten from people.
Lots of useful work isn't economically valuable enough to be done as a job.
For example, caring for the needy, many forms of art, and a large portion of journalism are among such jobs; where there's some demand but not much willingness to pay, while the job grants fulfilment and is a net positive for society - though not enough to pay a liveable wage, often because it gives fulfilment, so some people are willing to do it for near-free.
Apparently mining coal is also such a job - it's not economically worth it to pay people to go down a mine and dig out coal. In that regard, why not pay people basic income and let them choose whether they want to find fulfilment by spending their time doing gov't subsidized (by paying them liveable income for activities that aren't worth it) coal mining, or spend that time in a similarly subsidized alternative rock band? Both of these activities have some benefit to the people themselves and the potential customers, but aren't economically needed anyway, both of them literally aren't worth their time, so why is one better than the other?
If they have basic income, then would they need to be paid "livable" subsidized income for any activities they chose to do? I thought basic income was meant to be livable in itself.
It's worth separating what is a "conservative politician position" and a "conservative position". People are more nuanced than their parties. Also, their problems and approaches to solve them (i.e. taxes vs not) may differ even if they agree on the end goal.
Eh, it's more of a central Pennsylvania and West Virginia thing than a conservative thing. Those regions are peppered with towns that were propped up by coal mining, then had the rug pulled out from under them when the industry changed. It's similar to Detroit and the auto industry, or Pittsburgh and the steel industry. If you could bring everything back and revitalize your town, wouldn't you want to make that choice?
Absolutely, and I would actually like to see more of my tax dollars spent to assist struggling people and communities in general.
What confuses me is that many of the people calling for the government to help unemployed coal miners are the same people who sneer and spit if you say the government should help unemployed people in general.
They're actually different people in most cases. It's just that you probably lump everyone together that is far from you on the political spectrum. Don't worry, most people do the same as you, and in the process nuance is lost and stupid decisions are made.
What I posted is literally the position of the President of the United States and a good portion of the Republican Congress. Maybe those people don't actually represent their constituents' views (which is a different problem) but they are absolutely a force in modern American politics.
What you describe does happen, and I won't pretend that I don't do it too, despite my best efforts. But don't imagine that there aren't powerful legislators working from the position of "coal good, welfare bad".
The article completely disregards an important benefit of keeping mines open: national security. Germany has basically said it will forfeit its coal technology and rely instead on the US and Russia.
In the US I want to see these industries kept alive even with skeleton crews. A few billion in subsidies (tax breaks) is a pittance compared to allowing a local fuel source to atrophy.
Coal can be used for steel production. There are also electric arc furnaces, being used for around 25% of steel produced globally [1].
Also, only 12% of coal production is used to make steel [2].
Energy matters a lot more, since it is essential to military operation AND to production, and production is very heavily biased toward things other than large quantities of steel these days. Even a 1-2 year crash program of building new weapons in advance of a conflict is probably not limited by steel production.
You are wrong. Direct reduced iron[1] is made with natural gas instead of coal. The amount of steel currently made without coal is about the same as the amount of crude steel made in the US.
National Security? This is an US Hype. What conflict will appear in Germany in the next 100 years? Germany has friends all around. Two of them are members of the security council and own nuclear weapons. France even has an explicit policy of extending their nuclear (MAD) protection over Germany.
Central Europe has 70 years of peace thanks to the European Union. There is currently little realistic reason to believe this will change anytime soon.
There is no scenario which require steel sovereignity on standby. The only realistic scenarios (e.g. Russia being stupid) ends in a global inferno.
I suppose the difference in our worldview depends on whether we think the last 70 or so years of world history is the one that will stick, and we can safely ignore history up until that point.
From what I've read, the German green energy policy has caused:
* Really expensive per-KW/h power
* Shutting down nuclear and natural gas (some)
* Reliance on coal due to peaking/load/etc. issues with renewable
* Importing coal (high cost to transport, including energy cost)
* Dependence on Russia
It's good that they pushed solar and wind tech forward, but Germany just doesn't seem like a good place to deploy solar. Natural gas power is the cleanest fossil fuel and probably the best short term option (although without LNG it's still exposed to Russia), with renewables and Europe-wide grid ties in the longer term. Natural gas also has a 20-40 year lifespan for plants, so replacing coal with gas now and then replacing gas with even better renewables down the line seems like a good strategy.
This does not mean that they closed all coal mines, only a part of it, the good ones, hard coal. Still active are the dirty ones, the huge lignite (brown coal) surface mines at Garzweiler (NRW) and the Lausitz (near the polish border) Nochten, Reichwalde, Welzow-Süd and Jänschwalde.
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[ 2.7 ms ] story [ 163 ms ] threadKeeping coal mining on life support makes no sense. In the Ruhr area, the consequences of coal mining will still be felt for a very long time. It is necessary to run pumps for centuries to come so that the toxic mine water does not reach the groundwater level.
In contrast, the coal subsidies propped up a well-established industry with few players, with no end in sight and little oversight (as stated upthread: "No one really knows how much money exactly went in there").
Killing people can be a net savings for health services. The dead consume no services.
Yeah, sure, and I'm not saying something that kills people early always saves health system money. Just that it can (a lot of analysis of cigarette smoking have showed that reducing smoking in many countries has a net public cost, considering the aggregate of health and public pension payments, and I think in some cases that was true of health costs alone.
> Not to mention the fact that unhealthy levels of pollution can lower the quality of life for a great many citizens, something most people think that governments should care about.
Sure, quality of life is another important concern aside from health costs. I'm definitely not saying deadly pollution is a net good, even if it might save public health costs.
Setting up wind power plants will necessarily also have the building phase as the highest cost, but then direct running costs will be much lower as there's no raw material and much less personnel.
The subsidies that you are looking at currently for coal are essentially spent to avoid the mining operations and coal plants from making a loss.
The subsidies for wind power are primarily to finance new turbines to be built (& infrastructure). But you don't actually subsidise the operations.
In other words, if you look at current wind subsidies they are mainly to add capacity, if you look at coal subsidies they are to ensure the previously built capacity is used/available.
In addition, you have to remember previous subsidies- those of building, renovating, etc the coal mines and plants. If you do count those and calculate them eg per year of lifetime you get much higher amounts of 'real' subsidies, it's just that that money has already been spent.
A big downside of it all though is that Germany lost most (all?) of its wind & solar power manufacturers - so it's buying stuff from China, rather than supporting local industry. That is an element the government urgently needs to address ..
The companies that built solar power generation in 2004 got a guarantee of a certain price for x years, and a guarantee that the people who built in 2005 would get a lower price. IIRC the price decrease was set in advance. In effect a market introduction price, for a limited time. The sums are low/high until the market introduction ends, and the producers knew that as long as they could innovate 10%/year they'd make a profit. (Except that the actual number wasn't 10%.)
The companies that ran coal mines got a subsidy with no defined end-by date, and one cannot by any stretch of the imagination call it "market introduction aid" or "conditional on 10%/year innovation".
Can the political right please choose: either dump govt handouts across the board for energy or dump the exclusive love of fossil fuel jobs? Meanwhile, renewable energy makes 5-10X more employment opportunities and we hear no complaints about these jobs being affected by government cutbacks by anyone on the right.
From the article: "Wind, solar and other renewable sources, which account for 55 percent of German electricity capacity, are even more subsidized than coal mining, adding about 25 billion euros to power bills last year."
Also: this isn’t really about environmental concerns. Those just weren’t part of the story when this was decided in the 90s, at least not in terms of global warming. Acid rain, and the local trouble with large cities built on top of the mines grappling with more and more geological disturbances were a concern, but the real reasons were simply economics: German coal had become too expensive (around two decades ago). Shutting down it’s heavily-subsidized mining is also consistent with the stated goals of reducing CO_2, because buying on the world market will (slightly) raise prices.
There’s also the minor inaccuracy that Germany will continue mining lignite for a few years, although I guess that’s an acceptable simplification within the constraints of a headline.
The winding down of the coal industry is actually somewhat of a model for such processes. This used to be a hugely influential industry, both in economic powers, as well as cultural. Growing up in the 90s, I remember strikes, protests, and other events around the mining industry and its original boom towns featuring in the news about every second day.
To find compromises that did not satisfy any stakeholders, but succeeded in keeping the peace and, at long last, lead to an environmentally responsible energy strategy was quite a feat.
Civilization, released in 1991, features global warming whenever the amount of pollution in the world exceeds a threshold. (There's no distinction between one kind of pollution and another, so a common way to produce that much pollution would be detonating nuclear weapons, but coal is definitely implicated too.)
The 90s are when people worried about global warming. According to Google Books Ngram Search, "climate change" overtook "global warming" in 1994, crippling its steep upward trend.
I know the politics of countries outside the US are quite different, but I'm a huge fan of things like this statement. I truly think the best place for that money is to never leave the taxpayer's pocket.
2. Be angry that government is inefficient.
3. Goto step 1.
Have you been to (the equivalent of) DMV in other countries?
They live longer.
They are happier on every metric compare to Americans.
I never berate France, once I realized just how terrible we do things here.
(Up, or down vote me; I think I'm shadowbanned? And yes--to lazy to check myself.)
So let's say that the government produces one driver's license per $100, and I'm angry that it costs that much. Your proposal is that I will be happy if I instead spend $120 per license?
In that case the GP would be talking about appropriating more money for more DMV employees so that people could be done with their business their more expeditiously.
In your case, you're talking about monetary efficiency which is a different thing and might be better served by less employees serving the people.
And I guess it's up to society to decide where that line should be drawn in terms of both monetary efficiency for the tax payer and temporal efficiency for the person waiting in line.
1. Recognize "government is inefficient"
2. Use as an excuse to give the inefficient more with which to be inefficient
3. Goto step 1
Recognizing people are bad at some things doesn't mean it's a money problem nor does it mean that comparing different environments is apt.
2. Remove a stick of RAM from your computer to teach it a lesson
3. Get mad that your computer didn't magically do more with less
Far too often the solution is to continue removing RAM in the hopes that the inefficient process magically fixes itself. It rarely does.
There are certainly ways they could make the DMV more efficient, but don't mistake the almost universal unpleasantness of DMVs for inefficiency.
My experience tells me entity-scale is the main variable that determines efficient use of resources (all other things being equal), rather than private/public sector divide.
Which makes sense if you think about it: once you get away from small groups and sole individuals being able to give all things their attention, a private company has to effectively re-implement a form of government to operate internally.
While it may arguably be the main variable, and definitely the main variable within a sector, it shouldn't be used to discount the importance of goals/motivations/incentives. Although there are plenty of examples to the contrary in either direction, I think most also with experience would agree there is more waste and less accountability on one side compared to the other.
I can't really agree with the "more waste and less accountability on one side compared to the other", but that's primarily because the terms/measurements are so poorly defined and they differ so much country to country, state to state and with subject matter, and as I said, I believe that as institutions grow/mature, private industry must implement government anyway.
I guess what i'd rail against most is the idea that its the private/public idea itself that plays the significant part in efficiency and productivity: the idea that subsidising private industry, public-private partnerships, or privatising certain public roles or firms/industries somehow magically, by itself, makes things "more efficient".
If i were to reflect back on my own career, of the three top efficient organizations, two were medium-sized government departments, and the third was a small team non-profit of about 5 on a small government funding arrangement. Worst three were all private industry: big corp, big consultancy, little firm (although, admittedly, funded by government). Private industry had a huge problem with people being motivated by profits, rather than doing the job: hence directly incentivizing a seeking of inefficiency if not in a fully competitive market (which in the real world, is most markets these days, and certainly most markets with players of any scale).
There's a couple of throw-away populist lines I could give about the secret of efficiency I've observed, but i'll chose three: motivation/incentives, devolve responsibility down to the person best able to make the decision, and preference hands off and less work over more (which, to me, is almost the secret success of efficient free-market economies, the ability to just step back and use organic structures to just let things happen).
The comment about size is spot on. Two things going on.
Management at scale means trying to get 10,000 monkey's pointed mostly in the same direction[1]. There are huge governance issues with that. Private public does not matter[2]. Large organizations without these controls will eventually lose coherence and flame out.
However that mass has a quality of it it's own is in play. 10,000 monkeys can manage extremely large 'streams' of effort and punch way above the weight of the sum of all monkeys. In spite of the lack of efficiency.
[1] If you wonder why management isn't interested in your shiny new idea and wants you to to get back to work, that's why.
[2] If anything your local government is more interested in your complaints than say the cable company.
The problem is these "temporary" gov programs never end. And then eventually they live long past their prime.
Furthermore, as the become the new normal they tend to create unintended consequence. For example, farm subsidies for corn drove down the price of high fructose corn syrup. That made the sweetener ubiquitous.
Similar can be said for home loans and student loans. Once these programs take on a life of their own, the market becomes distorted and eventually bad - unforeseen - things happen.
I wish everyone competed in a free market (for the most part), but the energy market is not that.
They encourage different short term effects but they're both contributing to the same effect.
All that said, the subsidies in this case far outweighed the effect the tax would have had.
For example, you can make electric cars more appealing by increaing the tax on gas.
Where things get ugly is when the incentives are in conflict. Again, oil is subsidized and then taxed. Big Oil wins. Gov wins. Consumers - who pay the subsidy and the tax - lose.
Without a strong hand in regulation, dominant companies get fat and lazy, destroying anything in their path. Imagine the potential that would have been lost had the original AT&T not been under the yoke of regulation. The internet and the immense wealth it has created would never had existed. You’d be paying $300/mo for some ISDN style Western Electric modem to access AT&T’s version of AOL.
Look no further than the shitshow that is Facebook and Twitter for what happens when you let the free market run. We’ve brought back white supremacy and god knows what else in pursuit of user engagement.
Any idea what the energy market in Germany would have looked like absent subsidies entirely?
For those employed by the inefficient business that will no longer be subsidized, well, it may not be better for them, at least not in the short run.
Tragedy of the commons is an issue, but subsidizing a coal mine doesn't seem much like a tragedy of the commons issue to me. It seems more like your last words: a "political optimum", that is, something that produced votes, because the mine owners and workers want the subsidies much more strongly than the taxpayers want to not have to pay. That may be politically optimum, but it's not morally, socially, or economically optimum.
Nations have other motives than economic efficiency. The state should lead the market to meet national goals like clean energy infrastructure.
Coal subsidies are a way to increase military strength, or at least they used to be. War needs steel needs coal. That may no longer be the case with more advanced ways of creating steel without coal.
In a parallel comment (https://news.ycombinator.com/item?id=18736465), I said that giving money to those unable to compete "seems almost certain to be wasteful". I chose those words very carefully. I was thinking about food security rather than steel for war, but I was very deliberately leaving an escape hatch that, yes, sometimes you actually do want the inefficiency for other reasons.
Perhaps not for you, I feel like the augment about "hey we shouldn't subside that" is often tied to if someone likes it or not. But other subsides are ok...
* Coal is the main local energy source. Other sources have to be imported. Having coal mining gives some degree of independence from Arab Oil, Russian gas and Nigerian Uranium. * By subsadies over some time the economic change can be controlled to see degree instead of setting free about half a million mine workers, of which many had low qualifications, and a bunch of people in dependent industries free at once. The Ruhr area was fully dependent on coal mines as reason for the area's growth and hand hardly any non-coal related industry.
The idea of not subsidizing things is attractive, but the people pushing those ideas usually are really rooting for market instability, which benefits them directly at a cost to society.
For example, much of the hoohah behind current US government trade policy is about eliminating domestic competition. In agriculture, for example, small/medium dairy is in the process of being erased.
Disable labels and look at the beige patches on right center (south of Berlin). The vast majority seem to be open mines, presumably coal.
Switch to satellite View.
They also relocated entire towns.
It's the Protestant work ethic, I guess: work is inherently virtuous and deserving of reward even if it serves no purpose, and not working deserves punishment even if there's nothing useful for you to do.
If it was that, the same people wouldn't oppose solar subsidies that support jobs in that industry.
For example, caring for the needy, many forms of art, and a large portion of journalism are among such jobs; where there's some demand but not much willingness to pay, while the job grants fulfilment and is a net positive for society - though not enough to pay a liveable wage, often because it gives fulfilment, so some people are willing to do it for near-free.
Apparently mining coal is also such a job - it's not economically worth it to pay people to go down a mine and dig out coal. In that regard, why not pay people basic income and let them choose whether they want to find fulfilment by spending their time doing gov't subsidized (by paying them liveable income for activities that aren't worth it) coal mining, or spend that time in a similarly subsidized alternative rock band? Both of these activities have some benefit to the people themselves and the potential customers, but aren't economically needed anyway, both of them literally aren't worth their time, so why is one better than the other?
What confuses me is that many of the people calling for the government to help unemployed coal miners are the same people who sneer and spit if you say the government should help unemployed people in general.
What you describe does happen, and I won't pretend that I don't do it too, despite my best efforts. But don't imagine that there aren't powerful legislators working from the position of "coal good, welfare bad".
In the US I want to see these industries kept alive even with skeleton crews. A few billion in subsidies (tax breaks) is a pittance compared to allowing a local fuel source to atrophy.
[1] https://www.worldcoal.org/coal/uses-coal/how-steel-produced
[2] https://coalaction.org.nz/carbon-emissions/can-we-make-steel...
[1]: https://www.midrex.com/news-literature/news-releases/world-d...
Central Europe has 70 years of peace thanks to the European Union. There is currently little realistic reason to believe this will change anytime soon.
There is no scenario which require steel sovereignity on standby. The only realistic scenarios (e.g. Russia being stupid) ends in a global inferno.
It's good that they pushed solar and wind tech forward, but Germany just doesn't seem like a good place to deploy solar. Natural gas power is the cleanest fossil fuel and probably the best short term option (although without LNG it's still exposed to Russia), with renewables and Europe-wide grid ties in the longer term. Natural gas also has a 20-40 year lifespan for plants, so replacing coal with gas now and then replacing gas with even better renewables down the line seems like a good strategy.