lecture note 6

The provision is intended for companies to avoid

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Unformatted text preview: oil extracted abroad. The provision is intended for companies to avoid double taxation, but acts as a windfall for the oil industry. Other subsidies, such as paying for poor families’ heating oil, are more defensible. But the G20 agreed that all subsidies that encourage wasteful consumption must go. The IEA, along with the OECD, reckons that eliminating fossil-fuel subsidies would result in a 10% reduction in global greenhouse-gas emissions by 2050. Given a broad consensus around the need to reduce emissions by 50% by that year, to keep global warming at around 2°C, Mr Obama called the emissions cuts that would come from scrapping subsidies a good “down-payment”. The political details will be tricky. Subsidies have their defenders, often on the political left. In 2008, amid high oil prices, countries such as Egypt, India About our new page All science and technology http://www.economist.com/world/international/displaystory.cfm?story_id=14540043 10/7/2009...
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