By Arnold Kling
Adopting some variant of a tax on carbon, as both leading presidential candidates have proposed, would help eliminate this discrepancy.
That would set the stage for our next president to explain to other leaders why eliminating fuel subsidies would make the overall economic pie larger. Because the resulting efficiency gains can be redistributed so that everyone gets a bigger slice than before, the idea should be fairly easy to sell.
I think that the United States is in a weak position on the subsidy issue. We have agriculture subsidies, mortgage subsidies, alternative energy subsidies, and so forth.
I also think that it’s pretty weak to argue that other countries hurt us with their subsidies. They hurt themselves much more.