Resource title

Hard coal subsidies: a never-ending story?

Resource image

image for OpenScout resource :: Hard coal subsidies: a never-ending story?

Resource description

In Germany, hard coal has been subsidized for almost half a century. Despite the declining significance of hard coal production for the domestic labor market, the magnitude of subsidies increased until the middle of the last decade. In 1996, they peaked at ¤ 6.7 bill.While German hard coal subsidies have been shrinking to ¤ 2.7 bill. in 2005, it is very likely that they will be extended well into the next decade and even beyond. This article discusses the feeble arguments raised by the proponents of hard coal subsidization in Germany and other EU countries. Most importantly, in addition to the drain imposed on public budgets, these subsidies imply a substantial opportunity cost, leading funds away from alternative, more beneficial public investments. From a social welfare perspective, we therefore recommend the rapid abolition of these subsidies not only in Germany, where in nominal terms the accumulated amount of subsidies has now by far exceeded ¤ 130 bill., but all across Europe.

Resource author

Manuel Frondel, Rainer Kambeck, Christoph M. Schmidt

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18604

Resource license

Adapt according to the presented license agreement and reference the original author.