Subsidizing decrease gasoline consumption – marginal REVOLUTION

1) Why is the entire political dialogue in Europe centered on subsidizing gasoline consumption relatively than subsidizing the discount of gasoline consumption. This latter method is in keeping with the German/European coverage of shifting in direction of better dependence on renewable energies. Subsidizing consumption discount additionally reduces the danger of shortages if the northern winter is extreme. The coverage is straightforward to implement for households however is considerably tougher for companies to implement as some might profitably select to cut back employment and/or manufacturing, which might be politically troublesome. Nonetheless, this drawback may be solved by combining, for instance, an employment subsidy with the subsidy paid for decreased gasoline use.

That is from my e-mail, from economist Don Harding.