Since I’ve discussed climate economics before, I thought I would briefly highlight a recent seminar involving, amongst others, Steve Keen and Tim Lenton. The topic was are the estimates of economic damages from climate change erroneous? The basic answer to this questions is yes.
The presenters make a number of good points. Steve Keen highlights how there is little empirical support for the damage functions. There are attempts to estimate how economic activity depends on climate, but there is a huge difference how it might vary in different regions of the planet today, and how it might be impacted by global warming of a similar magnitude.
Tim Lenton highlighted how we may already be close to triggering certain tipping elements and how these economic analyses tend to ignore such outcomes, or may even not be able to properly consider them. In one economic analysis, it was suggested that the collapse of the Atlantic Meridional Overturning Circulation (AMOC) may have a positive economic impact because it might slightly dampen global warming. As Tim Lenton pointed out, this was an “insane” result given that such a collapse would result a major reorganisation of the entire climate system.
Matheus Grasselli, another of the speakers, presented quite a detailed analysis of William Nordhaus’s DICE model. He highlighted how it essentially assumes that the system is always in equilibrium, even if there has been some major shock. He also showed how the results depended strongly on assumptions about damages. What I thought was particularly interesting is that in the DICE model, everything seems to recover even in extreme scenarios.
So, it seems that there is a general view that there are many valid criticisms of these economic analyses. However, at the risk of being accussed of being deferential again, I do think there are many economists who acknowledge this and who are trying to do more appropriate analyses. I do think that some of the damage estimates are way too low, and that the results of some of these analyses have been presented in ways that then play into the hands of those who want to minimise the impact of climate change.
However, this is clearly a very complicated problem and we do need some kind of idea of the economic impact of climate change and what we might be able to do to limit the impact. The key thing, in my view, is to be upfront about the assumptions used in the models, the limitations of the models, and to recognise that there are many things that to which we simply can’t assign a quantitative value. I would be interested in what others think, though.
Links:
NAEC seminar : Are the estimates of economic damages from climate change erroneous? – seminar involving, amongst others, Steve Keen and Tim Lenton.
...and Then There's Physics 
One problem I have had with some of the dismissals of climate economics is that it sometimes come across a little like the way in which climate “skeptics” have dismissed huge swathes of climate science. I think there are very valid criticisms of climate economics, many of which are presented in the seminar I linked to in the post. However, I do think one should be careful of almost dismissing an entire field, even if some of what is promoted is indeed rather questionable.
From a very early slide on a meta-analysis – Social cost of carbon in the range of -$50 to $8,572 dollars per ton of carbon.
That’s quite a range!
Seems to me trying to get an estimate is a very important exercise, but that trying to pin policies on the correct estimate isn’t yet the logical objective. Instead, we should be considering different values in the face of uncertainty, including the potential of low probability but high damage function risk.
It strikes me how we have seen very much the same situation when considering policies for COVID. But as with COVID I think we will continue to be stuck in a rut where people argue about the correct numbers as a way to satisfy identity-protective and identity-aggressive cognition.
Methinks this is about human cognition and epistemology as much as about anything else.
Joshua,
I think that there is such a wide range of estimates tells you something about how reliably we can make these estimates. I don’t think it means we shouldn’t make them, but we should be open about that there is a wide range and that they are very sensitive to assumptions.
I think the cost of not addressing global warming is pretty high. I don’t want to cross some imaginary climate war line where that consideration is invalidated as “but AGW” or something like that, but I think the costs of insufficient action are quite high. I also think there is some consensus economic view that reductions in emissions now, no matter how expensive, is likely to be more cost-effective than addressing the emissions and trying to remove them from ocean and atmosphere later. Given those fundamental considerations, I am puzzled by the amount of energy that goes into the calculations as to how much we should spend and how fast we should spend it on ghg emission reduction. The answer is that we should spend as much as we can as fast as we can for a decade, then check the numbers and see how we are doing. We won’t do that. We will waste time studying the problems and doing cost benefit analysis and that study will delay even grabbing the “low hanging fruit” in our emission reduction project.
In the final analysis, I think we have to do less with less. And I think we will end up doing less with less, but I think it would be better if we reached that spot in a considered fashion rather than through supply chain disruption and other forms of slow collapse that we might expect in our global situation.
Cheers
Mike
Mr. Coday, I think you make a lot of sense. This should be the period for many a ‘ready, fire, aim’ initiatives–and indeed, some are already in action, with much tree planting etc. happening all over the globe.
However despite it being proposed by respected economists, a Pigouvian carbon tax with revenues rebated to the general public has not been able to take root. As this is most likely to be the sharpest knife in the drawer, that’s a pity. (I just had to put a plug in for my personal favorite solution.)
Completely agree on the tax idea, TF. Our species is unfortunately short of capability to take concerted, sensible action. I think our species prefers to study, analyze and argue. You have more than done your part to slow collective action on climate change with your work on the Crutapes book. I wonder if you regret that work now that you seem more convinced that we need to do something significant, like a tax and dividend approach?
I would argue that such a tax approach would need to be carefully crafted to make sure it would address income and wealth inequality. Our current economic model has folks in the highest bracket feeling the financial pinch when they want to go to outer space while folks in the lower bracket are struggling to cover first level Maslow hierarchy needs.
Cheers
Mike
I’m not sure it is entirely clear an estimate of the ‘economic impact’ of climate change is especially important. Clearly we need an idea of the impact of climate change on natural and human systems, but how much of that really is the domain of economists anyway?
e.g., are economists equipped to tell us how climate change will impact our food supply system?
Plenty of other approaches, like using historical precedent, or getting a bunch of science-fiction authors to tell stories around a campfire, or getting engineers to analyse the risk of catastrophic failure of essential systems. Figure out what the planetary boundaries are; then don’t cross them.
Sure, give the economists a place at the campfire, but not ahead of everyone else.
An alternative to worrying about damage functions is a ‘target-based’ approach: just set science-based thresholds and let economics talk about how to optimally meet it.
https://link.springer.com/article/10.1007/s10584-009-9570-x
Economics is on much safer ground talking about how much it will cost to replace dirty infrastructure (although even this it gets horribly wrong, of course).
(also, for what it is worth, large parts of the world are now covered by a carbon price)
link please to global carbon pricing you mentioned? Interested, but want to be sure we are talking apples and apples
Ben,
Yes, Jonathan Koomey has argued we should move beyond cost-benefit analyses.
https://iopscience.iop.org/article/10.1088/1748-9326/8/4/041005/meta
I tend to think that we should more be having discussions about how best to achieve net zero with the intention of meeting the Paris goals, rather than still discussing whether or not we should do so.
Have a look at:
https://carbonpricingdashboard.worldbank.org/
I’m mostly just talking about the EU (and now separate UK) carbon price though.
No doubt it isn’t everyone’s idea of a perfect carbon tax, but it does have the advantage of actually existing. It is certainly a lot easier to balance out the regressive effects of carbon pricing when you have broad-based welfare programs, of course.
ATTP: yes, I had probably read a whole bunch of stuff from Koomey and then forgotten where the ideas came from.
Indeed once you have committed to e.g. Paris targets damage functions are a bit besides the point.
Two thoughts .
One on carbon pricing.
Is it not exactly the same as paying a higher price for one’s petrol.
I notice a steep rise in the recent price of both coal and natural gas.
With consequent effects on cost and inflation.
Might the problem self limit itself when nobody can afford these products?
The second is more relevant to the issue of economic damage forecasting which has been discussed previously. You did have one modeller present his views here for a short while I recall.
The essence of the argument was that it is difficult to compare damage in financial terms historically to the present.
We only tend to look at things of human worth or value and again inflation and population and economic growth means one cannot compare damages past to present in any relevant way.
Born in Darwin NT I have a slight knowledge of the effect of cyclones [hurricane NH] and financial cost. If it had hit 50 km east or west there would have been hardly any financial or human loss.
as it is sparsely populated. Hitting the town itself it left a huge scar on the Australian psyche.
angech,
Not necessarily. A carbon price is meant to internalise externalities. This is essentially means trying to include additional (possibly future) costs to the price today. If prices are going up today because of events happening today, that still isn’t entirely equivalent to adding a carbon price because the externalities are still not being included.
The costs of mitigating climate change aren’t known well either. A new commercial non-fossil energy technology like: wind, solar or EV, is very valuable. Well worth the relatively modest cost to subsidize in the early stages. The current “energy crisis” a good example of the boom/bust economics of fossil fuels, which will only get worse in the future as fossil resources deplete.
Per the world bank link that Ben provided, we can round up and say that 22% of ghg emissions are subject to carbon pricing of one sort or another in 2021.
The States and Trends of Carbon Pricing blog at the World Bank has this to say about the current state: ….”it is clear the potential of carbon pricing is still largely untapped, with most carbon prices below the levels needed to drive significant decarbonization. More broadly, global emissions have continued to rise and current climate policies from governments and the private sector also continue to fall far short of what is needed to reach the temperature goals of the Paris Agreement. https://blogs.worldbank.org/climatechange/state-and-trends-carbon-pricing-2021
The EU carbon pricing project is a “cap and trade” plan designed to cut emissions by 55% by 2030 and to reach carbon neutrality by 2050. That’s an ambitious plan https://ec.europa.eu/clima/policies/ets_en that will influence economic activity in my opinion. We will have to wait and see how that plays out. Last month, there was a stay calm message out in the EU with a carbon pricing spike of some sort:
” A senior European Commission official insisted on delivering “a message of calm” during a EURACTIV event on Thursday (2 September), as CO2 prices rose for the first time above the €60 threshold on the EU carbon market.”
https://www.euractiv.com/section/emissions-trading-scheme/news/eu-urges-markets-to-keep-calm-as-carbon-price-hits-e60-record/
It would be helpful to enact a global carbon pricing plan, but that would face some obstacles, to put it mildly.
Cheers
Mike
Nations that have implemented a carbon pricing scheme are now also considering implementing things like a ‘carbon border adjustment scheme’ to tax goods from countries without carbon pricing. That is, countries without carbon pricing risk not just looking like international pariahs, but also facing punitive tariffs.
Not to say there aren’t obstacles, but the key is to identify those obstacles and figure out how to surmount them. First step is to get a critical mass of countries to enact carbon pricing.
By the way, the EU target of 55% less emissions is relative to 1990 levels. They have already dropped 24% by 2019. UK emissions have dropped even more dramatically. This is actually not a very ambitious target.
The problem of introducing carbon pricing in an equitable way is a real one, but as usual, a lot of the complaints are from people who repeatedly vote for policies that increase inequity. It helps a lot if you don’t give away many free credits to existing polluters, so you can use the tax receipts to e.g. subsidise heating/insulation for the poor.
Petrol prices are a political lightning rod, seems more likely that progress will be made there by regulation (mostly on health grounds) and EVs just being better. A carbon price is not a panacea.
Right at the outset the Steve Keen points out the incredible dynamic range — 4 orders of magnitude and where the fractional width is over 13!
All this tells me is that these experts (in that field) need a lot more time to develop and refine their theories and experimental results. It doesn’t seem as though they have much of a clue so far. What possibility might we, not comprehensively informed, make contributions that narrow their gap?
Perhaps, someday, they will develop their field well enough that it helps us better navigate. But that day seems well in the future. What’s the point kibbitzing on the current sausage-making processes in a field that is currently “hopelessly flawed”?
“We need to change. And we need to change radically, we need to change fast,” said EU vice-president Frans Timmermans. “And that’s going to be bloody hard.”
I don’t need economists debating the dollar-cost of a ton of carbon. Existence doesn’t have a price. And the question faced is in fact existential. The answers will be hard to swallow. But we must embrace them and achieve them, regardless.
Move on to a different topic. This one is a mess and needs time to right itself.
If you tire of estimating the social cost of methane, you can always move on to another alkane:
https://vvattsupwiththat.blogspot.com/2021/10/after-we-remove-all-methane-air.html
In a simple article (We’ve discussed the insanity of all this in past articles, so no need to reiterate.), we explained humans were not long ago looking at horse and buggies with envy, and in the 50’s, the first satellites went up, no where near to collating information, and scientists would have you believe they understand things we need more than another millennia to ask the correct questions. Like an article about the Earth giving off less light, so we asked, compared to what data? I know. I know. The readers aren’t looking to really understand, but this might help those on the fence between blind acceptance and truly thinking for themselves.
Not necessarily. A carbon price is meant to internalise externalities. This is essentially means trying to include additional (possibly future) costs to the price today. If prices are going up today because of events happening today, that still isn’t entirely equivalent to adding a carbon price because the externalities are still not being included.
I apologise for my usually negative takes on topics here , it comes with the territory and is hard to modulate. The best that can be said is that it gives a focus on the alternative mind set should help focus arguments.
Your comment,
“What I thought was particularly interesting is that in the DICE model, everything seems to recover even in extreme scenarios”.
does show an interesting counterpoint to testing ties.
Many great advances and recoveries are borne out of the desperation and determined desire to recover from hardship.
The old what does not kill us makes us stronger concept.
Seen in Australia recurrently after fires, droughts, floods etc.
Perhaps an American example after the devastating hurricane that hit New Orleans??
Still, one would not recommend deliberately going into disaster to improve matters, the human cost is too high.
Resilience, rebound and recovery might still be something people could hope for if the worst scenarios are visited temporarily as the wars of the last century showed.
@-dolphin
“Like an article about the Earth giving off less light, so we asked, compared to what data?”
The data covers the years from 1998 to 2017, it COULD be a response to the PDO, Earthshine is susceptible to warming in the E Pacific, but it also includes ice reflection.
If you want to dismiss the data, by all means attribute it to internal variability, although how you disconnect that from AGW is far from clear.
Whatever the cause it has a climate impact driving more warming.
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2021GL094888
“The two-decade decrease in earthshine-derived albedo corresponds to an increase in radiative forcing of about 0.5 W/m2, which is climatologically significant (Miller et al., 2014). For comparison, total anthropogenic forcing increased by about 0.6 W/m2 over the same period.
> Not necessarily.
Not necessarily what, Doc?
@-angech
“Still, one would not recommend deliberately going into disaster to improve matters, the human cost is too high.”
A comparison between Florida and Australia can be informative. Both have similar populations of around 21-24 million. Florida in response to the global Covid19 epidemic has opposed lockdowns, masks, and vaccination mandates, while Australia has been very tough in their imposition of precautions.
Florida has about 40x the deaths of Australia.
I suppose one could argue that deaths are irrelevant, that it is preserving a fully functional economy that matters…
It’s like a pool of data the size of a thimble compared to a sea of information over centuries. Trying to understand, or fake understanding, in a microcosm what happens in macro. Or, in another place, because one sees things in a pond, making a blanket statement about the ocean. **It’s either incredible ignorance, determined pride, need to find relevance because of not finding it in real life, or being fully propagandized/hypnotized by mass propaganda. Some people, because they see herds of people heading for the cliffs, go with them. I have seen that time and again, because all too-many people are afraid not to be popular, or to seem “different” from the sheep (I guess, in their minds, it’s better to be sheep, blindly thinking your wolves, then to be honest, and be seen as unwilling to blindly go along.). Thankfully, there are many that stop, see the propagandized herds heading over the cliffs, and step to the side and walk the safe way. Those are the ones that keep society from all going over the cliffs in ignorance, or one of the above.
@-dolphin
“It’s like a pool of data the size of a thimble compared to a sea of information over centuries. Trying to understand, or fake understanding, in a microcosm what happens in macro.”
This thimble of data indicates a climate impact. I make no claim beyond that or try to derive an understanding about some macro, century spanning event.
You seem to be saying that because it is not a long term string of data ANY conclusion that can be drawn is invalid. I think this risks throwing out data just on the basis of its length or spatial extent.
This may be unwise.
When “everything seems to recover even in extreme scenarios” in an economic model like this then both the theoretical deductions used resulting in boundary-valued modeling and the boundary conditions themselves need to be thoroughly re-examined.
Sure. Some problems are boundary-valued. Hadley cells, for example, pretty much always result from even simple models using Earth’s boundary conditions, regardless of initial conditions. Different situation, though.
Intuition tells me in this case that initial conditions should also matter. When they don’t, I feel very uncomfortable with both the assumptions made and also with the applied theoretical deductions, as incorporated.
I’m ignoring DICE, as constituted.
You write, “I do think there are many economists who acknowledge this and who are trying to do more appropriate analyses.” Could you suggest some names or titles? Being as ignorant as I am, I’d like to see what else is being cooked up elsewhere. Thanks!
Jon,
Some names that spring to mind are Gernot Wagner (who wrote Climate Shock with Martin Weitzman), Frances Moore (who has done work considering how climate change may impact economic growth), and Jonathan Koomey (who has done work suggesting that we should move beyond cost benefit analysis).
Maybe others can suggest some other names.
I’ll share this last, for the sake of readers who are learning to think for themselves. Never buy into anything out of what seems like mass belief. Never, never, never. Be determined to think for yourselves with responsiblity, and responsibility includes not accepting that you’re uncaring because you don’t follow propaganda. Often, what looks like stubborn behavior, strong principles, and tough stances is real caring, because it doesn’t allow hogwash, liars, or emotion-based rhetoric. **So, I share, and if people are dishonest or fooled, we go on, talking and sharing in the hopes people learn to think for themselves so our country isn’t filled with sheep.
Rereading, for sometimes we have to have fun as well. When I mentioned thimble sized data collection, I don’t think the response indicated a real understanding. And that’s the concern: too many people, including bloggers, who don’t understand, and yet….
@-dolphin
“When I mentioned thimble sized data collection, I don’t think the response indicated a real understanding.”
Would that be the fault of the recipient, or the writer ?
Using such metaphors may make for an interesting bit of polemic, but can be confusing for those of us who are empiricists.
@-dolphin
“Thankfully, there are many that stop, see the propagandized herds heading over the cliffs, and step to the side and walk the safe way.”
The global impact of Covid19 makes another point. The ‘herd’ looks at the data on vaccines and masks and takes the appropriate action. The ones that stop, and dismiss the facts, however short or incomplete the data, have a worse outcome.
Thanks so much, Ken. I will see what I can find from those names. I’d like to hope there is something better to be had.
Just now, thinking more, I’m wondering if anyone has considered the application of something I studied for a while more than three decades ago. Although it was overblown when published (which is partly why I bought and read it back in the early 1980’s when it was first published), I believe Robert Gilmore’s book on Catastrophe Theory remains an excellent introduction and study of discontinuous (that’s too strong a word, actually, as the changes are not really discontinuous but instead rather fast or sudden) changes of continuous functions (with the introduction of the infinitesimal of time) and the dynamics of changing local stability points (points of local stability are not necessarily fixed and stable, as is often assumed when discussing those ideas.) Insights there may be applicable in a wide variety of interacting LTI as well as non-linear dynamical systems. The book has great examples and writes remarkably clearly. My imagination sparkles with ideas and champs at the bit about how this might be considered in economic systems. But I’m so ignorant and no longer have the remaining life left to squander it here. So that’s all it is.
(There are a number of other works, prior and later, on invertible dynamical systems that are coming to mind now, too. And sorry about that…. Mathematics is my life, to so speak. And sensor physics and scientific instrumentation is the excuse I use to pay the bills while allowing me to get paid to do math I’d rather be doing. So it begs at me. But I have to shut it down.)
There’s this kind of stuff, where people just try to do standard analyses better, and account for deep uncertainty and learning:
https://doi.org/10.1016/j.enpol.2006.01.031
I guess it is somewhat useful to improve the ‘optimal economic path’ stuff even if ultimately the Paris targets are really the result of scientific understanding of how bad the impacts will be, and economics has been a bit sidelined.
One positive of the discussion on the discount rate stuff is that it clarifies what people think is important. Passing on a minimally damaged environment to people that will be living in 50-100 years time is now pretty universally regarded as essential.
So at least the economists have unwittingly produced a useful reductio ad absurdum.
A fundamental place to begin a discussion of climate change economics might be to look at subsidies to technology and industry that are unlikely to help us overcome our challenges. The Guardian has a piece about that here: https://www.theguardian.com/environment/2021/oct/06/fossil-fuel-industry-subsidies-of-11m-dollars-a-minute-imf-finds?utm_term=a12205bf45109c80183edbd8dee6598c&utm_campaign=USMorningBriefing&utm_source=esp&utm_medium=Email&CMP=usbriefing_email
Maybe 11 million dollars is not really a lot of money, but if it is digging our hole deeper why are we paying that out?
Cheers
Mike
should read 11 million dollars per minute – not really a lot of money?
Oi! Mr Physics!!
Where’s the post on Manabe’s Nobel???
(Srsly, great to see the recognition for laying the foundations of one of the most remarkable achievements of the physical sciences)
https://journals.ametsoc.org/downloadpdf/journals/atsc/27/4/1520-0469_1970_027_0580_tciati_2_0_co_2.xml
vtg,
Fair point. I should probably have written something 🙂
In the final analysis, I think we have to do less with less. And I think we will end up doing less with less, but I think it would be better if we reached that spot in a considered fashion rather than through supply chain disruption and other forms of slow collapse.
supply chain disruption wont be slow. its a cascade. people are just starting to grasp how fragile the current structures are.
if you thought the climate was sensitive just wait until you disrupt supply chains.
The fossil fuel companies believe the potential damages that might be proven or awarded in court cases are significant if they have spent over a trillion dollars on legal fees over the past five years battling cases.
I have trouble imagining what might have been accomplished with those funds if these companies sought a settlement and responsibility for damages.
https://www.theguardian.com/environment/2021/oct/09/fossil-fuel-companies-law-firms?utm_term=e22df090c9c9a6446cdffc3167ca6524&utm_campaign=GuardianTodayUS&utm_source=esp&utm_medium=Email&CMP=GTUS_email
A deal/settlement for a significant carbon tax is probably a better investment for the planet than the legal fees, but it does not seem that we are close to anything sensible like that.
Cheers
Mike
Unfortunately Mike, if it’s like most of those estimates, we’re not.
I’m more familiar with the EU one, but big energy subsidy numbers are typically arrived at by counting negative externalities not costed (IOW no carbon tax or one too small, a tax you as a consumer would pay one way or another, and have to in order to make you consume less), subsidies to home energy consumers (the UK charging less than the standard rate of VAT on electricity and gas, OPEC countries making the state oil company supply the domestic market at less than the cost of production), subsidies which are nothing to do with coal, oil and gas (the EU make an estimate of how much nuclear plants save by governments taking on the waste disposal chore and providing armed guards, include subsidies to nuclear build, and include subsidies or special prices paid to renewables and nuclear), tax relief on decommissioning (not a subsidy, any more than a plumber getting tax relief on his new van is a subsidy), etc. etc. etc.
Practically none of that goes to corporations or their shareholders, except in the marginal sense that keeping consumer prices down lets them sell more at the same profit margin. There is no magic money tree to spend on decarbonisation, and no free lunch.
The Guardian article says “facilitated $1.36tn of fossil fuel transactions”. IOW did the legal paperwork for company takeovers, refinery or pipeline builds, field developments, planning or licence applications or bids, whatever, grossing $1.36tn. The legal fees will have been a minuscule fraction of that.
$35m in compensation for their work to assist fossil fuel industry lobbying is $35m too much, but is a long way short of trillions.
That this👆sentence even seemed vaguely plausible to you as you were typing it speaks volumes.
You might want to read the article again, Mike. Slowly. Carefully. Intentionally. For comprehension. Maybe report back with the actual number fossil fuel spent defending court cases over the past five years.
[But ABC – W]
opps
like i said
not a slow collapse.
https://www.msn.com/en-us/money/markets/an-energy-crisis-is-gripping-the-world-with-potentially-grave-consequences/ar-AAPjcIE
tipping points in economies can be brutal
opps
https://apnews.com/article/climate-change-science-business-droughts-dams-3ca7b669ff6d18b4ba243ffb45c49230
at DG and RNS: yep, you’re right. My bad.
from the article: “Explicit subsidies that cut fuel prices accounted for 8% of the total and tax breaks another 6%. The biggest factors were failing to make polluters pay for the deaths and poor health caused by air pollution (42%) and for the heatwaves and other impacts of global heating (29%).”
I have been thinking about tobacco, guns and fossil fuels through the lens of product safety. Alcohol probably fits there along the lines of the movie “thank you for smoking.”
Once a profitable product has a head start on the produce safety regulation system, it seems really hard to gain control. Some products are simply so dangerous that they may not be fit for use. My own take on things like tobacco, maybe alcohol, too is that there should be no large scale industry with these products. I would like to let these things exist on a very small scale. Grow your own tobacco. Local smoke shops, etc. Same with alcohol. I haven’t thought this through much because it’s not going to happen. It may not be possible to unring the bell once an industry has developed and accumulated enough of a legal/political war chest to fight regulation.
Cheers
Mike
Apart from the question of direct subsidies, the complaint that a lot of military spending is a result of energy-related geopolitics seems largely justified. People in Europe are getting a neat illustration of the importance of geopolitics in energy supply right now.
Not entirely due to geopolitics, but the UK is in the process of dealing with a whole bunch of energy companies, who failed to hedge adequately, going bankrupt. I guess it would be possible to define the word ‘subsidy’ to exclude the public insuring the downside risks of fossil fuel companies but that certainly doesn’t look like the ‘invisible hand of the free market’ at work to me.