On Liberty

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https://en.wikipedia.org/wiki/On_Liberty 

 

On Liberty

The title page of the first edition, published 1859
Author	John Stuart Mill
Country	United Kingdom
Language	English
Subject	Liberty
Publication date	1859
Media type	Print
Dewey Decimal	323.44
LC Class	JC585
Text	On Liberty at Wikisource

On Liberty is a philosophical essay by the English philosopher John Stuart Mill. Published in 1859, it applies Mill's ethical system of utilitarianism to society and state. Mill suggests standards for the relationship between authority and liberty. He emphasizes the importance of individuality, which he considers prerequisite to the higher pleasures—the summum bonum of utilitarianism. Furthermore, Mill asserts that democratic ideals may result in the tyranny of the majority. Among the standards proposed are Mill's three basic liberties of individuals, his three legitimate objections to government intervention, and his two maxims regarding the relationship of the individual to society.

On Liberty was a greatly influential and well-received work. Some classical liberals and libertarians have criticized it for its apparent discontinuity with Utilitarianism, and vagueness in defining the arena within which individuals can contest government infringements on their personal freedom of action.

The ideas presented in On Liberty have remained the basis of much political thought. It has remained in print since its initial publication. A copy of On Liberty is passed to the president of the British Liberal Democrats as a symbol of office.

Mill's marriage to Harriet Taylor Mill greatly influenced the concepts in On Liberty, which was published shortly after she died.

Composition

According to Mill in his autobiography, On Liberty was first conceived as a short essay in 1854. As the ideas developed, the essay was expanded, rewritten and "sedulously" corrected by Mill and his wife, Harriet Taylor. Mill, after suffering a mental breakdown and eventually meeting and subsequently marrying Harriet, changed many of his beliefs on moral life and women's rights. Mill states that On Liberty "was more directly and literally our joint production than anything else which bears my name."

The final draft was nearly complete when his wife died suddenly in 1858. Mill suggests that he made no alterations to the text at this point and that one of his first acts after her death was to publish it and to "consecrate it to her memory." The composition of this work was also indebted to the work of the German thinker Wilhelm von Humboldt, especially his essay On the Limits of State Action. Finally published in 1859, On Liberty was one of Mill's two most influential books (the other being Utilitarianism).

Overview

Introduction

John Stuart Mill opens his essay by discussing the historical "struggle between authority and liberty," describing the tyranny of government, which, in his view, needs to be controlled by the liberty of the citizens. He divides this control of authority into two mechanisms: necessary rights belonging to citizens, and the "establishment of constitutional checks by which the consent of the community, or of a body of some sort, supposed to represent its interests, was made a necessary condition to some of the more important acts of the governing power." Because society was—in its early stages—subjected to such turbulent conditions (i.e. small population and constant war), it was forced to accept rule "by a master." However, as mankind progressed, it became conceivable for the people to rule themselves. Mill admits that this new form of society seemed immune to tyranny because "there was no fear of tyrannizing over self." Despite the high hopes of the Enlightenment, Mill argues that the democratic ideals were not as easily met as expected. First, even in democracy, the rulers were not always the same sort of people as the ruled. Second, there is a risk of a "tyranny of the majority" in which the many oppress the few who, according to democratic ideals, have just as much a right to pursue their legitimate ends.

In Mill's view, tyranny of the majority is worse than tyranny of government because it is not limited to a political function. Where one can be protected from a tyrant, it is much harder to be protected "against the tyranny of the prevailing opinion and feeling." The prevailing opinions within society will be the basis of all rules of conduct within society; thus there can be no safeguard in law against the tyranny of the majority. Mill's proof goes as follows: the majority opinion may not be the correct opinion. The only justification for a person's preference for a particular moral belief is that it is that person's preference. On a particular issue, people will align themselves either for or against that issue; the side of greatest volume will prevail, but is not necessarily correct. In conclusion to this analysis of past governments, Mill proposes a single standard for which a person's liberty may be restricted:

That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant ... Over himself, over his body and mind, the individual is sovereign.

Mill clarifies that this standard is solely based on utility, not on natural rights. According to Mill, children and "barbarian" nations are benefited by limited freedom. Just despots, such as Charlemagne and Akbar the Great, were historically beneficial to people not yet fit to rule themselves.

J. S. Mill concludes the Introduction by discussing what he claimed were the three basic liberties in order of importance:

1. The freedom of thought and emotion. This includes the freedom to act on such thought, i.e. freedom of speech
2. The freedom to pursue tastes (provided they do no harm to others), even if they are deemed "immoral"
3. The freedom to unite so long as the involved members are of age, the involved members are not forced, and no harm is done to others

While Mill admits that these freedoms could—in certain situations—be pushed aside, he claims that in contemporary and civilised societies there is no justification for their removal.

Of the liberty of thought and discussion

In the second chapter, J. S. Mill attempts to prove his claim from the first chapter that opinions ought never to be suppressed. Looking to the consequences of suppressing opinions, he concludes that opinions ought never to be suppressed, stating, "Such prejudice, or oversight, when it [i.e. false belief] occurs, is altogether an evil; but it is one from which we cannot hope to be always exempt, and must be regarded as the price paid for an inestimable good." He claims that there are three sorts of beliefs that can be had—wholly false, partly true, and wholly true—all of which, according to Mill, benefit the common good:

First, if any opinion is compelled to silence, that opinion may, for aught we can certainly know, be true. To deny this is to assume our own infallibility. Secondly, though the silenced opinion be an error, it may, and very commonly does, contain a portion of truth; and since the general or prevailing opinion on any subject is rarely or never the whole truth, it is only by the collision of adverse opinions that the remainder of the truth has any chance of being supplied. Thirdly, even if the received opinion be not only true, but the whole truth; unless it is suffered to be, and actually is, vigorously and earnestly contested, it will, by most of those who receive it, be held in the manner of a prejudice, with little comprehension or feeling of its rational grounds. And not only this, but, fourthly, the meaning of the doctrine itself will be in danger of being lost, or enfeebled, and deprived of its vital effect on the character and conduct: the dogma becoming a mere formal profession, inefficacious for good, but cumbering the ground, and preventing the growth of any real and heartfelt conviction, from reason or personal experience.

Mill spends a large portion of the chapter discussing implications of and objections to the policy of never suppressing opinions. In doing so, Mill explains his opinion of Christian ethics, arguing that, while they are praiseworthy, they are incomplete on their own. Therefore, Mill concludes that suppression of opinion based on belief in infallible doctrine is dangerous. Among the other objections Mill answers is the objection that the truth will necessarily survive persecution and that society need only teach the grounds for truth, not the objections to it. Near the end of Chapter 2, Mill states that "unmeasured vituperation, enforced on the side of prevailing opinion, deters people from expressing contrary opinion, and from listening to those who express them."

On individuality as one of the elements of well-being

In the third chapter, J. S. Mill points out the inherent value of individuality since individuality is ex vi termini (i.e. by definition) the thriving of the human person through the higher pleasures. He argues that a society ought to attempt to promote individuality as it is a prerequisite for creativity and diversity.

With this in mind, Mill believes that conformity is dangerous. He states that he fears that Western civilization approaches this well-intentioned conformity to praiseworthy maxims characterized by the Chinese civilization. Therefore, Mill concludes that actions in themselves do not matter. Rather, the person behind the action and the action together are valuable. He writes:

It really is of importance, not only what men do, but also what manner of men they are that do it. Among the works of man, which human life is rightly employed in perfecting and beautifying, the first in importance surely is man himself. Supposing it were possible to get houses built, corn grown, battles fought, causes tried, and even churches erected and prayers said, by machinery—by automatons in human form—it would be a considerable loss to exchange for these automatons even the men and women who at present inhabit the more civilised parts of the world, and who assuredly are but starved specimens of what nature can and will produce. Human nature is not a machine to be built after a model, and set to do exactly the work prescribed for it, but a tree, which requires to grow and develop itself on all sides, according to the tendency of the inward forces which make it a living thing.

On the limits to the authority of society over the individual

In the fourth chapter, J. S. Mill explains a system in which a person can discern what aspects of life should be governed by the individual and which by society. Generally, he holds that a person should be left as free to pursue his own interests as long as this does not harm the interests of others. In such a situation, "society has jurisdiction over [the person's conduct]." He rejects the idea that this liberty is simply for the purpose of allowing selfish indifference. Rather, he argues that this liberal system will bring people to the good more effectively than physical or emotional coercion. This principle leads him to conclude that a person may, without fear of just punishment, do harm to himself through vice. Governments, he claims, should only punish a person for neglecting to fulfill a duty to others (or causing harm to others), not the vice that brought about the neglect.

J. S. Mill spends the rest of the chapter responding to objections to his maxim. He notes the objection that he contradicts himself in granting societal interference with youth because they are irrational but denying societal interference with certain adults though they act irrationally. Mill first responds by restating the claim that society ought to punish the harmful consequences of the irrational conduct, but not the irrational conduct itself which is a personal matter. Furthermore, he notes the societal obligation is not to ensure that each individual is moral throughout adulthood. Rather, he states that, by educating youth, society has the opportunity and duty to ensure that a generation, as a whole, is generally moral.

Where some may object that there is justification for certain religious prohibitions in a society dominated by that religion, he argues that members of the majority ought make rules that they would accept should they have been the minority. He states, "unless we are willing to adopt the logic of persecutors, and say that we may persecute others because we are right, and that they must not persecute us because they are wrong, we must beware of admitting a principle of which we should resent as a gross injustice the application to ourselves." In saying this, he references an earlier claim that morals and religion cannot be treated in the same light as mathematics because morals and religion are vastly more complex. Just as with living in a society which contains immoral people, Mill points out that agents who find another's conduct depraved do not have to socialise with the other, merely refrain from impeding their personal decisions. While Mill generally opposes the religiously motivated societal interference, he admits that it is conceivably permissible for religiously motivated laws to prohibit the use of what no religion obligates. For example, a Muslim state could feasibly prohibit pork. However, Mill still prefers a policy of society minding its own business.

Applications

This last chapter applies the principles laid out in the previous sections. He begins by summarising these principles:

The maxims are, first, that the individual is not accountable to society for his actions, in so far as these concern the interests of no person but himself. Advice, instruction, persuasion, and avoidance by other people if thought necessary by them for their own good, are the only measures by which society can justifiably express its dislike or disapprobation of his conduct. Secondly, that for such actions as are prejudicial to the interests of others, the individual is accountable, and may be subjected either to social or to legal punishment, if society is of opinion that the one or the other is requisite for its protection.

Economy

Mill first applies these principles to the economy. He concludes that free markets are preferable to those controlled by governments. While it may seem, because "trade is a social act," that the government ought intervene in the economy, Mill argues that economies function best when left to their own devices. Therefore, government intervention, though theoretically permissible, would be counterproductive. Later, he attacks government-run economies as "despotic." He believes that if the government ran the economy, then all people would aspire to be part of a bureaucracy that had no incentive to further the interests of any but itself.

Preventing harm

Next Mill investigates in what ways a person may try to prevent harm. He first admits that a person should not wait for injury to happen, but ought try to prevent it. Second, he states that agents must consider whether that which can cause injury can cause injury exclusively. He gives the example of selling poison. Poison can cause harm. However, he points out that poison can also be used for good. Therefore, selling poison is permissible. Yet, due to the risk entailed in selling poison or like products (e.g. alcohol), he sees no danger to liberty to require warning labels on the product. Again, Mill applies his principle. He considers the right course of action when an agent sees a person about to cross a condemned bridge without being aware of the risk. Mill states that because the agent presumably has interest in not crossing a dangerous bridge (i.e. if he knew the facts concerned with crossing the bridge, he would not desire to cross the bridge), it is permissible to forcibly stop the person from crossing the bridge. He qualifies the assertion stating that, if the means are available, it is better to warn the unaware person.

With regard to taxing to deter agents from buying dangerous products, he makes a distinction. He states that to tax solely to deter purchases is impermissible because prohibiting personal actions is impermissible and "[e]very increase of cost is a prohibition, to those whose means do not come up to the augmented price." However, because a government must tax to some extent in order to survive, it may choose to take its taxes from what it deems most dangerous.

Repeat offences to public through private action

Mill expands upon his principle of punishing the consequences rather than the personal action. He argues that a person who is empirically prone to act violently (i.e. harm society) from drunkenness (i.e. a personal act) should be uniquely restricted from the drinking. He further stipulates that repeat offenders should be punished more than first time offenders.

Encouraging vice

On the subject of fornication and gambling, Mill has no conclusive answer, stating, "[t]here are arguments on both sides." He suggests that while the actions might be "tolerated" in private, promoting the actions (i.e. being a pimp or keeping a gambling house) "should not be permitted." He reaches a similar conclusion with acts of indecency, concluding that public indecency is condemnable.

Suicide and divorce

Mill continues by addressing the question of social interference in suicide. He states that the purpose of liberty is to allow a person to pursue their interest. Therefore, when a person intends to terminate their ability to have interests it is permissible for society to step in. In other words, a person does not have the freedom to surrender their freedom. To the question of divorce, Mill argues that marriages are one of the most important structures within society; however, if a couple mutually agrees to terminate their marriage, they are permitted to do so because society has no grounds to intervene in such a deeply personal contract.

Education

Mill believes that government run education is an evil because it would destroy diversity of opinion for all people to be taught the curriculum developed by a few. The less evil version of state run schooling, according to Mill, is that which competes against other privately run schools. In contrast, Mill believes that governments ought to require and fund private education. He states that they should enforce mandatory education through minor fines and annual standardised testing that tested only uncontroversial fact. He goes on to emphasise the importance of a diverse education that teaches opposing views (e.g. Kant and Locke). He concludes by stating that it is legitimate for states to forbid marriages unless the couple can prove that they have "means of supporting a family" through education and other basic necessities.

Conclusion

J. S. Mill concludes by stating three general reasons to object to governmental interference:

1. if agents do the action better than the government.
2. if it benefits agents to do the action though the government may be more qualified to do so.
3. if the action would add so greatly to the government power that it would become over-reaching or individual ambition would be turned into dependency on government.

He summarises his thesis, stating:

The worth of a State, in the long run, is the worth of the individuals composing it; and a State which postpones the interests of their mental expansion and elevation, to a little more of administrative skill, or of that semblance of it which practice gives, in the details of business; a State which dwarfs its men, in order that they may be more docile instruments in its hands even for beneficial purposes—will find that with small men no great thing can really be accomplished; and that the perfection of machinery to which it has sacrificed everything, will in the end avail it nothing, for want of the vital power which, in order that the machine might work more smoothly, it has preferred to banish.

Reception

On Liberty was enormously popular in the years following its publication. Thomas Hardy recalled later in life that undergraduates in the 1860s knew the book almost by heart. Criticisms of the book in the 19th century came chiefly from thinkers who felt that Mill's concept of liberty left the door open for barbarism, such as James Fitzjames Stephen and Matthew Arnold.

In more recent times, although On Liberty garnered adverse criticism, it has been largely received as an important classic of political thought for its ideas and accessibly lucid style. Denise Evans and Mary L. Onorato summarise the modern reception of On Liberty, stating: "[c]ritics regard his essay On Liberty as a seminal work in the development of British liberalism. Enhanced by his powerful, lucid, and accessible prose style, Mill's writings on government, economics, and logic suggest a model for society that remains compelling and relevant." As one sign of the book's importance, a copy of On Liberty is the symbol of office for the president of the Liberal Democrat Party in England.

Contradiction to utilitarianism

Mill makes it clear throughout On Liberty that he "regard[s] utility as the ultimate appeal on all ethical questions", a standard he inherited from his father, a follower of Jeremy Bentham. Though J. S. Mill claims that all of his principles on liberty appeal to the ultimate authority of utilitarianism, according to Nigel Warburton, much of the essay can seem divorced from his supposed final court of appeals. Mill seems to idealize liberty and rights at the cost of utility. For instance, Mill writes:

If all mankind minus one, were of one opinion, and only one person were of contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind.

This claim seems to go against the principle of utilitarianism, that it is permissible that one should be harmed so that the majority could benefit.

Warburton argues that Mill is too optimistic about the outcome of free speech. Warburton suggests that there are situations in which it would cause more happiness to suppress truth than to permit it. For example, if a scientist discovered a comet about to kill the planet in a matter of weeks, it may cause more happiness to suppress the truth than to allow society to discover the impending danger.

While David Brink concedes that Mill's apparently categorical appeal to rights seems to contradict utilitarianism, he points out that Mill does not believe rights are truly categorical because Mill opposes unrestrained liberty (e.g. offensive public exposure).

Furthermore, David Brink tries to reconcile Mill's system of rights with utilitarianism in three ways:

1. Rights are secondary principles to the Greatest Happiness Principle
2. Rights are incomparable goods, justifying their categorical enforcement
3. Liberty is a good. Thus, those who suppress it are worthy of punishment. Rights deal with the value of punishing/protecting others' interference with liberty, not the actual protection of liberty.

Narrow focus

Some thinkers have criticised Mill's writing for its apparent narrow or unclear focus in several areas. Mill makes clear that he only considers adults in his writing, failing to account for how irrational members of society, such as children, ought to be treated. Yet Mill's theory relies upon the proper upbringing of children. Plank has asserted that Mill fails to account for physical harm, solely concerning himself with spiritual wellbeing. He also argues that, while much of Mill's theory depends upon a distinction between private and public harm, Mill seems not to have provided a clear focus on or distinction between the private and public realms.

Religious criticism

Nigel Warburton states that though Mill encourages religious tolerance, because he does not speak from the perspective of a specific religion, some claim that he does not account for what certain religious beliefs would entail when governing a society. Some religions believe that they have a God given duty to enforce religious norms. For them, it seems impossible for their religious beliefs to be wrong, i.e. the beliefs are infallible. Therefore, according to Warburton, Mill's principle of total freedom of speech may not apply.

Conception of harm

The harm principle is central to the principles in On Liberty. Nigel Warburton says that Mill appears unclear about what constitutes harm. Early in the book, he claims that simply being offensive does not constitute harm. Later, he writes that certain acts which are permissible and harmless in private are worthy of being prohibited in public. This seems to contradict his earlier claim that merely offensive acts do not warrant prohibition because, presumably, the only harm done by a public act which is harmless in private is that it is offensive.

Warburton notes that some people argue that morality is the basis of society, and that society is the basis of individual happiness. Therefore, if morality is undermined, so is individual happiness. Hence, since Mill claims that governments ought to protect the individual's ability to seek happiness, governments ought to intervene in the private realm to enforce moral codes.

Charges of racism and colonialism

Mill is clear that his concern for liberty does not extend to all individuals and all societies. He states that "Despotism is a legitimate mode of government in dealing with barbarians". Contemporary philosophers Domenico Losurdo and David Theo Goldberg have strongly criticised Mill as a racist and an apologist for colonialism. However, during his term as a Member of Parliament, he chaired the extraparliamentary Jamaica Committee, which for two years unsuccessfully sought the prosecution of Governor Eyre and his subordinates for military violence against Jamaican Blacks.

Climate sensitivity

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Climate_sensitivity 

 

Diagram of factors that determine climate sensitivity. After increasing CO
2 levels, there is an initial warming. This warming gets amplified by the net effect of feedbacks. Self-reinforcing feedbacks include the melting of sunlight-reflecting ice, and higher evaporation increasing average atmospheric water vapour (a greenhouse gas).

Climate sensitivity is a measure of how much the Earth's climate will cool or warm after a change in the climate system, for instance, how much it will warm for doubling in carbon dioxide (CO
2) concentrations. In technical terms, climate sensitivity is the average change in the Earth's surface temperature in response to changes in radiative forcing, the difference between incoming and outgoing energy on Earth. Climate sensitivity is a key measure in climate science, and a focus area for climate scientists, who want to understand the ultimate consequences of anthroprogenic climate change.

The Earth's surface warms as a direct consequence of increased atmospheric CO
2, as well as increased concentrations of other greenhouse gases such as nitrous oxide and methane. Increasing temperatures have secondary effects on the climate system, such as an increase in atmospheric water vapour, which is itself also a greenhouse gas. Because scientists do not know exactly how strong these climate feedbacks are, it is difficult to precisely predict the amount of warming that will result from a given increase in greenhouse gas concentrations. If climate sensitivity turns out to be on the high side of scientific estimates, the Paris Agreement goal of limiting global warming to below 2 °C (3.6 °F) will be difficult to achieve.

The two primary types of climate sensitivity are the shorter-term "transient climate response", the increase in global average temperature that is expected to have occurred at a time when the atmospheric CO
2 concentration has doubled; and "equilibrium climate sensitivity", the higher long-term increase in global average temperature expected to occur after the effects of a doubled CO
2 concentration have had time to reach a steady state. Climate sensitivity is typically estimated in three ways; using direct observations of temperature and levels of greenhouse gases taken during the industrial age; using indirectly estimated temperature and other measurements from the Earth's more distant past; and modelling the various aspects of the climate system with computers.

Background

The rate at which energy reaches Earth as sunlight, and leaves Earth as heat radiation to space, must balance, or the total amount of heat energy on the planet at any one time will rise or fall, resulting in a planet that is warmer or cooler overall. An imbalance between the rates of incoming and outgoing radiation energy is called radiative forcing. A warmer planet radiates heat to space faster, so eventually a new balance is reached, with a higher planetary temperature. However, the warming of the planet also has knock-on effects. These knock-on effects create further warming, in an exacerbating feedback loop. Climate sensitivity is a measure of how much temperature change a given amount of radiative forcing will cause.

Radiative forcing

Radiative forcing is generally defined as the imbalance between incoming and outgoing radiation at the top of the atmosphere. Radiative forcing is measured in Watts per square meter (W/m²), the average imbalance in energy per second for each square meter of the Earth's surface.

Changes to radiative forcing lead to long-term changes in global temperature. A number of factors can affect radiative forcing: increased downwelling radiation due to the greenhouse effect, variability in solar radiation due to changes in planetary orbit, changes in solar irradiance, direct and indirect effects caused by aerosols (for example changes in albedo due to cloud cover), and changes in land use (i.e. deforestation or loss of reflective ice cover). In contemporary research, radiative forcing by greenhouse gases is well understood. As of 2019, large uncertainties remain for aerosols.

Key numbers

Carbon dioxide (CO
2) levels rose from 280 parts per million (ppm) in the eighteenth century, when humans in the Industrial Revolution started burning significant amounts of fossil fuel such as coal, to over 415 ppm by 2020. As CO
2 is a greenhouse gas, it hinders heat energy from leaving the Earth's atmosphere. In 2016, atmospheric CO
2 levels had increased by 45% over preindustrial levels, and radiative forcing caused by increased CO
2 was already more than 50% higher than in preindustrial times (due to non-linear effects). Between the start of the Industrial Revolution in the eighteenth century and 2020, the Earth's temperature rose by a little over one degree Celsius (about two degrees Fahrenheit).

Societal importance

Because the economics of climate change mitigation depend a lot on how quickly carbon neutrality needs to be achieved, climate sensitivity estimates can have important economic and policy-making implications. One study suggests that halving the uncertainty of the value for transient climate response (TCR) could save trillions of dollars. Scientists are uncertain about the precision of estimates of greenhouse gas increases on future temperature – a higher climate sensitivity would mean more dramatic increases in temperature – which makes it more prudent to take significant climate action. If climate sensitivity turns out to be on the high end of what scientists estimate, it will be impossible to achieve the Paris Agreement goal of limiting global warming to well below 2 °C; temperature increases will exceed that limit, at least temporarily. One study estimated that emissions cannot be reduced fast enough to meet the 2 °C goal if equilibrium climate sensitivity (the long-term measure) is higher than 3.4 °C (6.1 °F). The more sensitive the climate system is to changes in greenhouse gas concentrations, the more likely it is to have decades when temperatures are much higher or much lower than the longer-term average.

Contributors to climate sensitivity

Radiative forcing is one component of climate sensitivity. The radiative forcing caused by a doubling of atmospheric CO
2 levels (from the preindustrial 280 ppm) is approximately 3.7 watts per square meter (W/m²). In the absence of feedbacks, this energy imbalance would eventually result in roughly 1 °C (1.8 °F) of global warming. This figure is straightforward to calculate using the Stefan-Boltzmann law and is undisputed.

A further contribution arises from climate feedbacks, both exacerbating and suppressing. The uncertainty in climate sensitivity estimates is due entirely to modeling of feedbacks in the climate system, including water vapour feedback, ice-albedo feedback, cloud feedback, and lapse rate feedback. Suppressing feedbacks tend to counteract warming, increasing the rate at which energy is radiated to space from a warmer planet. Exacerbating feedbacks increase warming; for example, higher temperatures can cause ice to melt, reducing the ice area and the amount of sunlight the ice reflects, resulting in less heat energy being radiated back into space. Climate sensitivity depends on the balance between these feedbacks.

Measures of climate sensitivity

Schematic of how different measures of climate sensitivity relate to one another

Depending on the time scale, there are two main ways to define climate sensitivity: the short-term transient climate response (TCR) and the long-term equilibrium climate sensitivity (ECS), which both incorporate the warming from exacerbating feedback loops. These are not discrete categories; they overlap. Sensitivity to atmospheric CO
2 increases is measured in the amount of temperature change for doubling in the atmospheric CO
2 concentration.

Although "climate sensitivity" is usually used for the sensitivity to radiative forcing caused by rising atmospheric CO
2, it is a general property of the climate system. Other agents can also cause a radiative imbalance. Climate sensitivity is the change in surface air temperature per unit change in radiative forcing, and the climate sensitivity parameter is therefore expressed in units of °C/(W/m²). Climate sensitivity is approximately the same, whatever the reason for the radiative forcing (e.g. from greenhouse gases or solar variation). When climate sensitivity is expressed as the temperature change for a level of atmospheric CO
2 double the pre-industrial level, its units are degrees Celsius (°C).

Transient climate response

The transient climate response (TCR) is defined as "is the change in the global mean surface temperature, averaged over a 20-year period, centered at the time of atmospheric carbon dioxide doubling, in a climate model simulation" in which the atmospheric CO
2 concentration is increasing at 1% per year. This estimate is generated using shorter-term simulations. The transient response is lower than the equilibrium climate sensitivity, because slower feedbacks, which exacerbate the temperature increase, take more time to respond in full to an increase in the atmospheric CO
2 concentration. For instance, the deep ocean takes many centuries to reach a new steady state after a perturbation; during this time, it continues to serve as heatsink, cooling the upper ocean. The IPCC literature assessment estimates that TCR likely lies between 1 °C (1.8 °F) and 2.5 °C (4.5 °F).

A related measure is the transient climate response to cumulative carbon emissions (TCRE), which is the globally averaged surface temperature change after 1000 GtC of CO
2 has been emitted. As such, it includes not only temperature feedbacks to forcing, but also the carbon cycle and carbon cycle feedbacks.

Equilibrium climate sensitivity

The equilibrium climate sensitivity (ECS) is the long-term temperature rise (equilibrium global mean near-surface air temperature) that is expected to result from a doubling of the atmospheric CO
2 concentration (ΔT_2×). It is a prediction of the new global mean near-surface air temperature once the CO
2 concentration has stopped increasing and most of the feedbacks have had time to have their full effect. Reaching an equilibrium temperature can take centuries, or even millennia, after CO
2 has doubled. ECS is higher than TCR due to the oceans' short-term buffering effects. Computer models are used to estimate ECS. A comprehensive estimate means modelling the whole time span during which significant feedbacks continue to change global temperatures in the model; for instance, fully equilibrating ocean temperatures requires running a computer model that covers thousands of years. There are, however, less computing-intensive methods.

The IPCC Fifth Assessment Report (AR5) stated that "there is high confidence that ECS is extremely unlikely to be less than 1 °C and medium confidence that the ECS is likely between 1.5 °C and 4.5 °C and very unlikely greater than 6 °C". The long time scales involved with ECS make it arguably a less relevant measure for policy decisions around climate change.

Effective climate sensitivity

A common approximation to ECS is the effective equilibrium climate sensitivity. The effective climate sensitivity is an estimate of equilibrium climate sensitivity using data from a climate system, either in a model or real-world observations, that is not yet in equilibrium. Estimates assume that the net amplification effect of feedbacks (as measured after some period of warming) will remain constant afterwards. This is not necessarily true, as feedbacks can change with time. In many climate models, feedbacks become stronger over time, so that the effective climate sensitivity is lower than the real ECS.

Earth system sensitivity

By definition, equilibrium climate sensitivity does not includes feedbacks that take millennia to emerge, such as long-term changes in Earth's albedo due to changes in ice sheets and vegetation. It does include the slow response of the deep ocean warming up, which also takes millennia, and as such ECS doesn't reflect the actual future warming that would occur if CO
2 is stabilized at double pre-industrial values. Earth system sensitivity (ESS) incorporates the effects of these slower feedback loops, such as the change in Earth's albedo from the melting of large continental ice sheets (which covered much of the northern hemisphere during the Last Glacial Maximum, and currently cover Greenland and Antarctica). Changes in albedo as a result of vegetation changes, and changes in ocean circulations are also included. These longer-term feedback loops make the ESS larger than the ECS – possibly twice as large. Data from Earth's geological history is used to estimate ESS. Differences between modern and long-past climatic conditions mean that estimates of future ESS are highly uncertain. Like for ECS and TCR, the carbon cycle is not included in the definition of ESS, but all other elements of the climate system are.

Sensitivity to nature of the forcing

Different forcing agents, such as greenhouse gases and aerosols, can be compared using their radiative forcing (which is the initial radiative imbalance averaged over the entire globe). Climate sensitivity is the amount of warming per radiative forcing. To a first approximation, it does not matter the cause of the radiative imbalance is, whether it is greenhouse gases or something else. However, radiative forcing from sources other than CO
2 can cause a somewhat larger or smaller surface warming than a similar radiative forcing due to CO
2; the amount of feedback varies, mainly because these forcings are not uniformly distributed over the globe. Forcings that initially warm the northern hemisphere, land, or polar regions more strongly are systematically more effective at changing temperatures than an equivalent forcing due to CO
2, whose forcing is more uniformly distributed over the globe. This is because these regions have more self-reinforcing feedbacks, such as the ice-albedo feedback. Several studies indicate that human-emitted aerosols are more effective than CO
2 at changing global temperatures, while volcanic forcing is less effective. When climate sensitivity to CO
2 forcing is estimated using historical temperature and forcing (caused by a mix of aerosols and greenhouse gases), and this effect is not taken into account, climate sensitivity will be underestimated.

State dependence

Artist impression of a snowball Earth state.

While climate sensitivity has been defined as the short- or long-term temperature change resulting from any doubling of CO
2, there is evidence that the sensitivity of Earth's climate system is not constant. For instance, the planet has polar ice and high-altitude glaciers. Until the world's ice has completely melted, an exacerbating ice-albedo feedback loop makes the system more sensitive overall. Throughout Earth's history, there are thought to have been multiple periods where snow and ice covered almost the entire globe. In most models of this "snowball Earth" state, parts of the tropics were at least intermittently free of ice cover. As the ice was advancing or retreating, climate sensitivity would have been very high, as the large changes in area of ice cover would have made for a very strong ice-albedo feedback. Volcanic atmospheric composition changes are thought to have provided the radiative forcing needed to escape the snowball state.

Equilibrium climate sensitivity can change with climate.

Throughout the Quaternary period (the most recent 2.58 million years), climate has oscillated between glacial periods, of which the most recent was the Last Glacial Maximum, and interglacial periods, of which the most recent is the current Holocene, but climate sensitivity is difficult to determine in this period. The Paleocene–Eocene Thermal Maximum, circa 55.5 million years ago, was unusually warm, and may have been characterized by above-average climate sensitivity.

Climate sensitivity may further change if tipping points are crossed. It is unlikely that tipping points will cause short-term changes in climate sensitivity. If a tipping point is crossed, climate sensitivity is expected to change at the time scale of the subsystem that is hitting its tipping point. Especially if there are multiple interacting tipping points, the transition of climate to a new state may be difficult to reverse.

The two most used definitions of climate sensitivity specify the climate state: ECS and TCR are defined for a doubling with respect to the CO
2 levels in the pre-industrial era. Because of potential changes in climate sensitivity, the climate system may warm by a different amount after a second doubling of CO
2 than after a first doubling. The effect of any change in climate sensitivity is expected to be small or negligible in the first century after additional CO
2 is released into the atmosphere.

Estimating climate sensitivity

Historical estimates

Svante Arrhenius, in the 19th century, was the first person to quantify global warming as a consequence of a doubling of CO
2 concentration. In his first paper on the matter, he estimated that global temperature would rise by around 5 to 6 °C (9.0 to 10.8 °F) if the quantity of CO
2 was doubled. In later work, he revised this estimate to 4 °C (7.2 °F). Arrhenius used Samuel Pierpont Langley's observations of radiation emitted by the full moon to estimate the amount of radiation that was absorbed by water vapour and CO
2. To account for water vapour feedback, he assumed that relative humidity would stay the same under global warming.

The first calculation of climate sensitivity using detailed measurements of absorption spectra, and the first to use a computer to numerically integrate the radiative transfer through the atmosphere, was performed by Syukuro Manabe and Richard Wetherald in 1967. Assuming constant humidity, they computed an equilibrium climate sensitivity of 2.3 °C per doubling of CO
2 (which they rounded to 2 °C, the value most often quoted from their work, in the abstract of the paper). This work has been called "arguably the greatest climate-science paper of all time" and "the most influential study of climate of all time."

A committee on anthropogenic global warming, convened in 1979 by the United States National Academy of Sciences and chaired by Jule Charney, estimated equilibrium climate sensitivity to be 3 °C (5.4 °F), plus or minus 1.5 °C (2.7 °F). The Manabe and Wetherald estimate (2 °C (3.6 °F)), James E. Hansen's estimate of 4 °C (7.2 °F), and Charney's model were the only models available in 1979. According to Manabe, speaking in 2004, "Charney chose 0.5 °C as a reasonable margin of error, subtracted it from Manabe's number, and added it to Hansen's, giving rise to the 1.5 to 4.5 °C (2.7 to 8.1 °F) range of likely climate sensitivity that has appeared in every greenhouse assessment since ...." In 2008, climatologist Stefan Rahmstorf said: "At that time [it was published], the [Charney report estimate's] range [of uncertainty] was on very shaky ground. Since then, many vastly improved models have been developed by a number of climate research centers around the world."

Intergovernmental Panel on Climate Change

Historical estimates of climate sensitivity from the IPCC assessments. The first three reports gave a qualitative likely range, while the fourth and fifth assessment report formally quantified the uncertainty. The dark blue range is judged as being more than 66% likely.

Despite considerable progress in the understanding of Earth's climate system, assessments continued to report similar uncertainty ranges for climate sensitivity for some time after the 1979 Charney report. The 1990 IPCC First Assessment Report estimated that equilibrium climate sensitivity to a doubling of CO
2 lay between 1.5 and 4.5 °C (2.7 and 8.1 °F), with a "best guess in the light of current knowledge" of 2.5 °C (4.5 °F). This report used models with simplified representations of ocean dynamics. The IPCC supplementary report, 1992, which used full-ocean circulation models, saw "no compelling reason to warrant changing" the 1990 estimate; and the IPCC Second Assessment Report said that "No strong reasons have emerged to change [these estimates]". In these reports, much of the uncertainty around climate sensitivity was attributed to insufficient knowledge of cloud processes. The 2001 IPCC Third Assessment Report also retained this likely range.

Authors of the 2007 IPCC Fourth Assessment Report stated that confidence in estimates of equilibrium climate sensitivity had increased substantially since the Third Annual Report. The IPCC authors concluded that ECS is very likely to be greater than 1.5 °C (2.7 °F) and likely to lie in the range 2 to 4.5 °C (3.6 to 8.1 °F), with a most likely value of about 3 °C (5.4 °F). The IPCC stated that, due to fundamental physical reasons and data limitations, a climate sensitivity higher than 4.5 °C (8.1 °F) could not be ruled out, but that the climate sensitivity estimates in the likely range agreed better with observations and proxy climate data.

The 2013 IPCC Fifth Assessment Report reverted to the earlier range of 1.5 to 4.5 °C (2.7 to 8.1 °F) (with high confidence), because some estimates using industrial-age data came out low. (See the next section for details.) The report also stated that ECS is extremely unlikely to be less than 1 °C (1.8 °F) (high confidence), and is very unlikely to be greater than 6 °C (11 °F) (medium confidence). These values were estimated by combining the available data with expert judgement.

When the Ipcc begun to produce its IPCC Sixth Assessment Report many climate models begun to show higher climate sensitivity. The estimates for Equilibrium Climate Sensitivity changed from 3.2 °C to 3.7 °C and the estimates for the Transient climate response from 1.8 °C, to 2.0 °C. This is probably due to better understanding of the role of clouds and aerosols.

Methods of estimation

Using industrial-age (1750–present) data

Climate sensitivity can be estimated using observed temperature rise, observed ocean heat uptake, and modelled or observed radiative forcing. These data are linked though a simple energy-balance model to calculate climate sensitivity. Radiative forcing is often modelled, because Earth observation satellites that measure it existed during only part of the industrial age (only since the mid-20th century). Estimates of climate sensitivity calculated using these global energy constraints have consistently been lower than those calculated using other methods, around 2 °C (3.6 °F) or lower.

Estimates of transient climate response (TCR) calculated from models and observational data can be reconciled if it is taken into account that fewer temperature measurements are taken in the polar regions, which warm more quickly than the Earth as a whole. If only regions for which measurements are available are used in evaluating the model, differences in TCR estimates are negligible.

A very simple climate model could estimate climate sensitivity from industrial-age data by waiting for the climate system to reach equilibrium and then measuring the resulting warming, ΔT_eq (°C). Computation of the equilibrium climate sensitivity, S (°C), using the radiative forcing ΔF (W/m²) and the measured temperature rise, would then be possible. The radiative forcing resulting from a doubling of CO
2, F_{2${\displaystyle \times }$CO2}, is relatively well known, at about 3.7 W/m². Combining this information results in the following equation:

${\displaystyle S=\Delta T_{eq}\times F_{2\times CO_{2}}/\Delta F}$.

However, the climate system is not in equilibrium. Actual warming lags the equilibrium warming, largely because the oceans take up heat and will take centuries or millennia to reach equilibrium. Estimating climate sensitivity from industrial-age data requires an adjustment to the equation above. The actual forcing felt by the atmosphere is the radiative forcing minus the ocean's heat uptake, H (W/m²), so that climate sensitivity can be estimated by:

${\displaystyle S=\Delta T\times F_{2\times CO_{2}}/(\Delta F-H).}$

The global temperature increase between the beginning of the industrial period (taken as 1750) and 2011 was about 0.85 °C (1.53 °F). In 2011, the radiative forcing due to CO
2 and other long-lived greenhouse gases – mainly methane, nitrous oxide, and chlorofluorocarbons – emitted since the eighteenth century was roughly 2.8 W/m². The climate forcing, ΔF, also contains contributions from solar activity (+0.05 W/m²), aerosols (−0.9 W/m²), ozone (+0.35 W/m²), and other smaller influences, bringing the total forcing over the industrial period to 2.2 W/m², according to the best estimate of the IPCC AR5, with substantial uncertainty. The ocean heat uptake estimated by the IPCC AR5 as 0.42 W/m², yields a value for S of 1.8 °C (3.2 °F).

Other strategies

In theory, industrial-age temperatures could also be used to determine a timescale for the temperature response of the climate system, and thus climate sensitivity: if the effective heat capacity of the climate system is known, and the timescale is estimated using autocorrelation of the measured temperature, an estimate of climate sensitivity can be derived. In practice, however, simultaneous determination of the timescale and heat capacity is difficult.

Attempts have been made to use the 11-year solar cycle to constrain the transient climate response. Solar irradiance is about 0.9 W/m² higher during a solar maximum than during a solar minimum, and the effects of this can be observed in measured average global temperatures over the period 1959–2004. Unfortunately, the solar minima in this period coincided with volcanic eruptions, which have a cooling effect on the global temperature. Because the eruptions caused a larger and less well quantified decrease in radiative forcing than the reduced solar irradiance, it is questionable whether useful quantitative conclusions can be derived from the observed temperature variations.

Observations of volcanic eruptions have also been used to try to estimate climate sensitivity, but as the aerosols from a single eruption last at most a couple of years in the atmosphere, the climate system can never come close to equilibrium, and there is less cooling than there would be if the aerosols stayed in the atmosphere for longer. Therefore, volcanic eruptions give information only about a lower bound on transient climate sensitivity.

Using data from Earth's past

Historical climate sensitivity can be estimated by using reconstructions of Earth's past temperatures and CO
2 levels. Paleoclimatologists have studied different geological periods, such as the warm Pliocene (5.3 to 2.6 million years ago) and the colder Pleistocene (2.6 million to 11,700 years ago), seeking periods that are in some way analogous to or informative about current climate change. Climates further back in Earth's history are more difficult to study, because less data is available about them. For instance, past CO
2 concentrations can be derived from air trapped in ice cores, but as of 2020, the oldest continuous ice core is less than one million years old. Recent periods, such as the Last Glacial Maximum (LGM) (about 21,000 years ago) and the Mid-holocene (about 6,000 years ago), are often studied, especially when more information about them becomes available.

A 2007 estimate of sensitivity made using data from the most recent 420 million years is consistent with sensitivities of current climate models and with other determinations. The Paleocene–Eocene Thermal Maximum (about 55.5 million years ago), a 20,000-year period during which massive amount of carbon entered the atmosphere and average global temperatures increased by approximately 6 °C (11 °F), also provides a good opportunity to study the climate system when it was in a warm state. Studies of the last 800,000 years have concluded that climate sensitivity was greater in glacial periods than in interglacial periods.

As the name suggests, the LGM was a lot colder than today; there is good data on atmospheric CO
2 concentrations and radiative forcing during that period. While orbital forcing was different from that of the present, it had little effect on mean annual temperatures. Estimating climate sensitivity from the LGM can be done in several different ways. One way is to use estimates of global radiative forcing and temperature directly. The set of feedback mechanisms active during the LGM, however, may be different from the feedbacks caused by a doubling of CO
2 in the present, introducing additional uncertainty. In a different approach, a model of intermediate complexity is used to simulate conditions during the LGM. Several versions of this single model are run, with different values chosen for uncertain parameters, such that each version has a different ECS. Outcomes that best simulate observed cooling during the LGM probably produce the most realistic ECS values.

Using climate models

Frequency distribution of equilibrium climate sensitivity, based on simulations of doubling CO
2. Each model simulation has different estimates for processes that scientists do not sufficiently understand. Few of the simulations result in less than 2 °C (3.6 °F) of warming or significantly more than 4 °C (7.2 °F). However, the positive skew, which is also found in other studies, suggests that if carbon dioxide concentrations double, the probability of large or very large increases in temperature is greater than the probability of small increases.

Climate models are used to simulate the CO
2-driven warming of the future as well as the past. They operate on principles similar to those underlying models that predict the weather, but they focus on longer-term processes. Climate models typically begin with a starting state, then apply physical laws and knowledge about biology to generate subsequent states. As with weather modeling, no computer has the power to model the full complexity of the entire planet, so simplifications are used to reduce this complexity to something manageable. An important simplification divides Earth's atmosphere into model cells. For instance, the atmosphere might be divided into cubes of air ten or one hundred kilometers on a side. Each model cell is treated as if it were homogeneous. Calculations for model cells are much faster than trying to simulate each molecule of air separately.

A lower model resolution (large model cells, long time steps) takes less computing power, but it cannot simulate the atmosphere in as much detail. A model is unable able to simulate processes smaller than the model cells or shorter-term than a single time step. The effects of these smaller-scale (and shorter-term) processes must therefore be estimated using other methods. Physical laws contained in the models may also be simplified to speed up calculations. The biosphere must be included in climate models. The effects of the biosphere are estimated using data on the average behaviour of the average plant assemblage of an area under the modelled conditions. Climate sensitivity is therefore an emergent property of these models; it is not prescribed, but follows from the interaction of all the modelled processes.

To estimate climate sensitivity, a model is run using a variety of radiative forcings (doubling quickly, doubling gradually, or following historical emissions) and the temperature results are compared to the forcing applied. Different models give different estimates of climate sensitivity, but they tend to fall within a similar range, as described above.

Testing, comparisons, and estimates

Modelling of the climate system can lead to a wide range of outcomes. Models are often run using different plausible parameters in their approximation of physical laws and the behaviour of the biosphere, forming a perturbed physics ensemble that attempts to model the sensitivity of the climate to different types and amounts of change in each parameter. Alternatively, structurally different models developed at different institutions are put together, creating an ensemble. By selecting only those simulations that can simulate some part of the historical climate well, a constrained estimate of climate sensitivity can be made. One strategy for obtaining more accurate results is placing more emphasis on climate models that perform well in general.

A model is tested using observations, paleoclimate data, or both to see if it replicates them accurately. If it does not, inaccuracies in the physical model and parametrizations are sought and the model is modified. For models used to estimate climate sensitivity, specific test metrics that are directly and physically linked to climate sensitivity are sought; examples of such metrics are the global patterns of warming, the ability of a model to reproduce observed relative humidity in the tropics and subtropics, patterns of heat radiation, and the variability of temperature around long-term historical warming. Ensemble climate models developed at different institutions tend to produce constrained estimates of ECS that are slightly higher than 3 °C (5.4 °F); the models with ECS slightly above 3 °C (5.4 °F) simulate the above situations better than models with a lower climate sensitivity.

Many projects and groups exist which compare and analyse the results of multiple models. For instance, the Coupled Model Intercomparison Project (CMIP) has been running since the 1990s.

In preparation for the 2021 6th IPCC report, a new generation of climate models have been developed by scientific groups around the world. The average estimated climate sensitivity has increased in Coupled Model Intercomparison Project phase 6 (CMIP6) compared to the previous generation, with values spanning 1.8 to 5.6 °C (3.2 to 10.1 °F) across 27 global climate models and exceeding 4.5 °C (8.1 °F) in 10 of them. The cause of the increased ECS lies mainly in improved modelling of clouds; temperature rises are now believed to cause sharper decreases in the number of low clouds, and fewer low clouds means more sunlight is absorbed by the planet rather than reflected back into space. Models with the highest ECS values, however, are not consistent with observed warming.

Subsidy

From Wikipedia, the free encyclopedia

A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy.

Although commonly extended from the government, the term subsidy can relate to any type of support – for example from NGOs or as implicit subsidies. Subsidies come in various forms including: direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, accelerated depreciation, rent rebates).

Furthermore, they can be broad or narrow, legal or illegal, ethical or unethical. The most common forms of subsidies are those to the producer or the consumer. Producer/production subsidies ensure producers are better off by either supplying market price support, direct support, or payments to factors of production. Consumer/consumption subsidies commonly reduce the price of goods and services to the consumer. For example, in the US at one time it was cheaper to buy gasoline than bottled water.

Types

Production subsidy

A production subsidy encourages suppliers to increase the output of a particular product by partially offsetting the production costs or losses. The objective of production subsidies is to expand production of a particular product more so that the market would promote but without raising the final price to consumers. This type of subsidy is predominantly found in developed markets. Other examples of production subsidies include the assistance in the creation of a new firm (Enterprise Investment Scheme), industry (industrial policy) and even the development of certain areas (regional policy). Production subsidies are critically discussed in the literature as they can cause many problems including the additional cost of storing the extra produced products, depressing world market prices, and incentivizing producers to over-produce, for example, a farmer overproducing in terms of his land's carrying capacity.

Consumer/consumption subsidy

A consumption subsidy is one that subsidizes the behavior of consumers. This type of subsidies are most common in developing countries where governments subsidise such things as food, water, electricity and education on the basis that no matter how impoverished, all should be allowed those most basic requirements. For example, some governments offer 'lifeline' rates for electricity, that is, the first increment of electricity each month is subsidized. Evidence from recent studies suggests that government expenditures on subsidies remain high in many countries, often amounting to several percentage points of GDP. Subsidization on such a scale implies substantial opportunity costs. There are at least three compelling reasons for studying government subsidy behavior. First, subsidies are a major instrument of government expenditure policy. Second, on a domestic level, subsidies affect domestic resource allocation decisions, income distribution, and expenditure productivity. A consumer subsidy is a shift in demand as the subsidy is given directly to consumers.

Export subsidy

An export subsidy is a support from the government for products that are exported, as a means of assisting the country's balance of payments. Usha Haley and George Haley identified the subsidies to manufacturing industry provided by the Chinese government and how they have altered trade patterns. Traditionally, economists have argued that subsidies benefit consumers but hurt the subsidizing countries. Haley and Haley provided data to show that over the decade after China joined the World Trade Organization industrial subsidies have helped give China an advantage in industries in which they previously enjoyed no comparative advantage such as the steel, glass, paper, auto parts, and solar industries. China’s shores have also collapsed from overfishing and industrialization, which is why the Chinese government heavily subsidizes its fishermen, who sail the world in search of new grounds.

Export subsidy is known for being abused. For example, some exporters substantially over declare the value of their goods so as to benefit more from the export subsidy. Another method is to export a batch of goods to a foreign country but the same goods will be re-imported by the same trader via a circuitous route and changing the product description so as to obscure their origin. Thus the trader benefits from the export subsidy without creating real trade value to the economy. Export subsidy as such can become a self-defeating and disruptive policy.

Import subsidy

An import subsidy is support from the government for products that are imported. Rarer than an export subsidy, an import subsidy further reduces the price to consumers for imported goods. Import subsidies have various effects depending on the subject. For example, consumers in the importing country are better off and experience an increase in consumer welfare due to the decrease in price of the imported goods, as well as the decrease in price of the domestic substitute goods. Conversely, the consumers in the exporting country experience a decrease in consumer welfare due to an increase in the price of their domestic goods. Furthermore, producers of the importing country experience a loss of welfare due to a decrease of the price for the good in their market, while on the other side, the exporters of the producing country experience an increase in well being due to the increase in demand. Ultimately, the import subsidy is rarely used due to an overall loss of welfare for the country due to a decrease in domestic production and a reduction in production throughout the world. However, that can result in a redistribution of income.

Employment subsidy

An employment subsidy serves as an incentive to businesses to provide more job opportunities to reduce the level of unemployment in the country (income subsidies) or to encourage research and development. With an employment subsidy, the government provides assistance with wages. Another form of employment subsidy is the social security benefits. Employment subsidies allow a person receiving the benefit to enjoy some minimum standard of living.

Tax subsidy

Governments can create the same outcome through selective tax breaks as through cash payments. For example, if a government sends monetary assistance that reimburses 15% of all health expenditures to a group that is paying 15% income tax. Exactly the same subsidy is achieved by giving a health tax deduction. Tax subsidies are also known as tax expenditures.

Tax breaks are often considered to be a subsidy. Like other subsidies, they distort the economy; but tax breaks are also less transparent, and are difficult to undo.

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting is a treaty signed by half the nations of the world and it is aimed to prevent Base Erosion and Profit Shifting, a particular form of tax subsidy related to Intellectual Property.

Transport subsidies

Some governments subsidise transport, especially rail and bus transport, which decrease congestion and pollution compared to cars. In the EU, rail subsidies are around €73 billion, and Chinese subsidies reach $130 billion.

Publicly-owned airports can be an indirect subsidy if they lose money. The European Union, for instance, criticizes Germany for its high number of money-losing airports that are used primarily by low cost carriers, characterizing the arrangement as an illegal subsidy.

In many countries, roads and highways are paid for through general revenue, rather than tolls or other dedicated sources that are paid only by road users, creating an indirect subsidy for road transportation. The fact that long-distance buses in Germany do not pay tolls has been called an indirect subsidy by critics, who point to track access charges for railways.

Oil subsidies

An oil subsidy is one aimed at decreasing the overall price of oil. Oil subsidies have always played a major part in U.S. history. These began as early as World War I and have increased in the following decades. However, due to changes in the perceptions of the environment, in 2012 President Barack Obama ended the subsidies to the oil industry, which were, at the time, $4 billion. The Secretary-General of the United Nations António Guterres called for an end of subsidies for fossil fuels.

Housing subsidies

Housing subsidies are designed to promote the construction industry and homeownership. As of 2018, U.S housing subsidies total around $15 billion per year. Housing subsidies can come in two types; assistance with down payment and interest rate subsidies. The deduction of mortgage interest from the federal income tax accounts for the largest interest rate subsidy. Additionally, the federal government will help low-income families with the down payment, coming to $10.9 million in 2008.

Environmental externalities

As well as the conventional and formal subsidies as outlined above there are myriad implicit subsidies principally in the form of environmental externalities. These subsidies include anything that is omitted but not accounted for and thus is an externality. These include things such as car drivers who pollute everyone's atmosphere without compensating everyone, farmers who use pesticides which can pollute everyone's ecosystems, again without compensating everyone, or Britain's electricity production which results in additional acid rain in Scandinavia. In these examples the polluter is effectively gaining a net benefit but not compensating those affected. Although they are not subsidies in the form of direct economic support from a government, they are no less economically, socially and environmentally harmful.

A 2015 report studied the implicit subsidies accruing to 20 fossil fuel companies and found that, while highly profitable, the hidden economic cost to society was also large. The report spans the period 2008–2012 and notes that: "for all companies and all years, the economic cost to society of their CO
2 emissions was greater than their after‐tax profit, with the single exception of ExxonMobil in 2008." Pure coal companies fare even worse: "the economic cost to society exceeds total revenue (employment, taxes, supply purchases, and indirect employment) in all years, with this cost varying between nearly $2 and nearly $9 per $1 of revenue."

Categorising subsidies

Broad and narrow

These various subsidies can be divided into broad and narrow. Narrow subsidies are those monetary transfers that are easily identifiable and have a clear intent. They are commonly characterised by a monetary transfer between governments and institutions or businesses and individuals. A classic example is a government payment to a farmer.

Conversely broad subsidies include both monetary and non-monetary subsidies and is often difficult to identify. A broad subsidy is less attributable and less transparent. Environmental externalities are the most common type of broad subsidy.

Economic effects

Competitive equilibrium is a state of balance between buyers and suppliers, in which the quantity demanded of a good is the quantity supplied at a specified price. When the quantity demand exceeds the equilibrium quantity, price falls; conversely, a reduction in the supply of a good beyond equilibrium quantity implies an increase in the price. The effect of a subsidy is to shift the supply or demand curve to the right (i.e. increases the supply or demand) by the amount of the subsidy. If a consumer is receiving the subsidy, a lower price of a good resulting from the marginal subsidy on consumption increases demand, shifting the demand curve to the right. If a supplier is receiving the subsidy, an increase in the price (revenue) resulting from the marginal subsidy on production results increases supply, shifting the supply curve to the right.

Assuming the market is in a perfectly competitive equilibrium, a subsidy increases the supply of the good beyond the equilibrium competitive quantity. The imbalance creates deadweight loss. Deadweight loss from a subsidy is the amount by which the cost of the subsidy exceeds the gains of the subsidy. The magnitude of the deadweight loss is dependent on the size of the subsidy. This is considered a market failure, or inefficiency.

Subsidies targeted at goods in one country, by lowering the price of those goods, make them more competitive against foreign goods, thereby reducing foreign competition. As a result, many developing countries cannot engage in foreign trade, and receive lower prices for their products in the global market. This is considered protectionism: a government policy to erect trade barriers in order to protect domestic industries. The problem with protectionism arises when industries are selected for nationalistic reasons (infant-industry), rather than to gain a comparative advantage. The market distortion, and reduction in social welfare, is the logic behind the World Bank policy for the removal of subsidies in developing countries.

Subsidies create spillover effects in other economic sectors and industries. A subsidized product sold in the world market lowers the price of the good in other countries. Since subsidies result in lower revenues for producers of foreign countries, they are a source of tension between the United States, Europe and poorer developing countries. While subsidies may provide immediate benefits to an industry, in the long-run they may prove to have unethical, negative effects. Subsidies are intended to support public interest, however, they can violate ethical or legal principles if they lead to higher consumer prices or discriminate against some producers to benefit others. For example, domestic subsidies granted by individual US states may be unconstitutional if they discriminate against out-of-state producers, violating the Privileges and Immunities Clause or the Dormant Commerce Clause of the United States Constitution. Depending on their nature, subsidies are discouraged by international trade agreements such as the World Trade Organization (WTO). This trend, however, may change in the future, as needs of sustainable development and environmental protection could suggest different interpretations regarding energy and renewable energy subsidies. In its July 2019 report, "Going for Growth 2019: The time for reform is now", the OECD suggests that countries make better use of environmental taxation, phase out agricultural subsidies and environmentally harmful tax breaks.

Perverse subsidies

Definitions

Although subsidies can be important, many are "perverse", in the sense of having adverse unintended consequences. To be "perverse", subsidies must exert effects that are demonstrably and significantly adverse both economically and environmentally. A subsidy rarely, if ever, starts perverse, but over time a legitimate efficacious subsidy can become perverse or illegitimate if it is not withdrawn after meeting its goal or as political goals change. Perverse subsidies are now so widespread that as of 2007 they amounted $2 trillion per year in the six most subsidised sectors alone (agriculture, fossil fuels, road transportation, water, fisheries and forestry).

Effects

The detrimental effects of perverse subsidies are diverse in nature and reach. Case-studies from differing sectors are highlighted below but can be summarised as follows.

Directly, they are expensive to governments by directing resources away from other legitimate should priorities (such as environmental conservation, education, health, or infrastructure), ultimately reducing the fiscal health of the government.

Indirectly, they cause environmental degradation (exploitation of resources, pollution, loss of landscape, misuse and overuse of supplies) which, as well as its fundamental damage, acts as a further brake on economies; tend to benefit the few at the expense of the many, and the rich at the expense of the poor; lead to further polarization of development between the Northern and Southern hemispheres; lower global market prices; and undermine investment decisions reducing the pressure on businesses to become more efficient. Over time the latter effect means support becomes enshrined in human behaviour and business decisions to the point where people become reliant on, even addicted to, subsidies, 'locking' them into society.

Consumer attitudes do not change and become out-of-date, off-target and inefficient; furthermore, over time people feel a sense of historical right to them.

Implementation

Perverse subsidies are not tackled as robustly as they should be. Principally, this is because they become 'locked' into society, causing bureaucratic roadblocks and institutional inertia. When cuts are suggested many argue (most fervently by those 'entitled', special interest groups and political lobbyists) that it will disrupt and harm the lives of people who receive them, distort domestic competitiveness curbing trade opportunities, and increase unemployment. Individual governments recognise this as a 'prisoner's dilemma' – insofar as that even if they wanted to adopt subsidy reform, by acting unilaterally they fear only negative effects will ensue if others do not follow. Furthermore, cutting subsidies, however perverse they may be, is considered a vote-losing policy.

Reform of perverse subsidies is at a propitious time. The current economic conditions mean governments are forced into fiscal constraints and are looking for ways to reduce activist roles in their economies. There are two main reform paths: unilateral and multilateral. Unilateral agreements (one country) are less likely to be undertaken for the reasons outlined above, although New Zealand, Russia, Bangladesh and others represent successful examples. Multilateral actions by several countries are more likely to succeed as this reduces competitiveness concerns, but are more complex to implement requiring greater international collaboration through a body such as the WTO. Irrespective of the path, the aim of policymakers should be to: create alternative policies that target the same issue as the original subsidies but better; develop subsidy removal strategies allowing market-discipline to return; introduce 'sunset' provisions that require remaining subsidies to be re-justified periodically; and make perverse subsidies more transparent to taxpayers to alleviate the 'vote-loser' concern.

Examples

Agricultural subsidies

Support for agriculture dates back to the 19th century. It was developed extensively in the EU and USA across the two World Wars and the Great Depression to protect domestic food production, but remains important across the world today. In 2005, US farmers received $14 billion and EU farmers $47 billion in agricultural subsidies. Today, agricultural subsidies are defended on the grounds of helping farmers to maintain their livelihoods. The majority of payments are based on outputs and inputs and thus favour the larger producing agribusinesses over the small-scale farmers. In the USA nearly 30% of payments go to the top 2% of farmers.

By subsidising inputs and outputs through such schemes as 'yield based subsidisation', farmers are encouraged to over-produce using intensive methods, including using more fertilizers and pesticides; grow high-yielding monocultures; reduce crop rotation; shorten fallow periods; and promote exploitative land use change from forests, rainforests and wetlands to agricultural land. These all lead to severe environmental degradation, including adverse effects on soil quality and productivity including erosion, nutrient supply and salinity which in turn affects carbon storage and cycling, water retention and drought resistance; water quality including pollution, nutrient deposition and eutrophication of waterways, and lowering of water tables; diversity of flora and fauna including indigenous species both directly and indirectly through the destruction of habitats, resulting in a genetic wipe-out.

Cotton growers in the US reportedly receive half their income from the government under the Farm Bill of 2002. The subsidy payments stimulated overproduction and resulted in a record cotton harvest in 2002, much of which had to be sold at very reduced prices in the global market. For foreign producers, the depressed cotton price lowered their prices far below the break-even price. In fact, African farmers received 35 to 40 cents per pound for cotton, while US cotton growers, backed by government agricultural payments, received 75 cents per pound. Developing countries and trade organizations argue that poorer countries should be able to export their principal commodities to survive, but protectionist laws and payments in the United States and Europe prevent these countries from engaging in international trade opportunities.

Fisheries

Today, much of the world's major fisheries are overexploited; in 2002, the WWF estimate this at approximately 75%. Fishing subsidies include "direct assistant to fishers; loan support programs; tax preferences and insurance support; capital and infrastructure programs; marketing and price support programs; and fisheries management, research, and conservation programs." They promote the expansion of fishing fleets, the supply of larger and longer nets, larger yields and indiscriminate catch, as well as mitigating risks which encourages further investment into large-scale operations to the disfavour of the already struggling small-scale industry. Collectively, these result in the continued overcapitalization and overfishing of marine fisheries.

There are four categories of fisheries subsidies. First are direct financial transfers, second are indirect financial transfers and services. Third, certain forms of intervention and fourth, not intervening. The first category regards direct payments from the government received by the fisheries industry. These typically affect profits of the industry in the short term and can be negative or positive. Category two pertains to government intervention, not involving those under the first category. These subsidies also affect the profits in the short term but typically are not negative. Category three includes intervention that results in a negative short-term economic impact, but economic benefits in the long term. These benefits are usually more general societal benefits such as the environment. The final category pertains to inaction by the government, allowing producers to impose certain production costs on others. These subsidies tend to lead to positive benefits in the short term but negative in the long term.

Others

The US National Football League's (NFL) profits have topped records at $11 billion, the highest of all sports. The NFL had tax-exempt status until voluntarily relinquishing it in 2015, and new stadiums have been built with public subsidies.

The Commitment to Development Index (CDI), published by the Center for Global Development, measures the effect that subsidies and trade barriers actually have on the undeveloped world. It uses trade, along with six other components such as aid or investment, to rank and evaluate developed countries on policies that affect the undeveloped world. It finds that the richest countries spend $106 billion per year subsidizing their own farmers – almost exactly as much as they spend on foreign aid.