 The Political Economy of Coal Subsidies in EuropeNo 1089, CEPR Discussion Papers from Centre for Economic Policy Research Abstract: Both the mining and the burning of coal is pollutive, so one might expect to observe taxes on coal production and consumption. Yet several countries in Western Europe subsidize coal production, and most East European countries subsidize coal consumption. The first part of this paper shows that those subsidies, which are emulated by other rich and poor countries respectively, have become enormous. Neoclassical political economy is used to examine why governments adopt such inappropriate policies when they are so wasteful of resources and damaging to the environment. Several new and offsetting political forces have been at work in Western Europe in recent years though, causing some countries to dismantle their coal producer subsidies. The paper concludes that these pressures for reform will continue to operate in the few remaining protectionist countries such that, if coupled with more commercial diplomatic pressure from coal-exporting countries, they could be sufficient to see the end of such protection by early next century. Keywords: Coal Subsidies; Coal Trade Liberalization; Eastern Europe; European Union; Political Economy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:1089 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK. |
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