Tuesday, May 5, 2015

Paying With Our Lungs - and Wallets

'Subsidies for fuels have cost the nation more than 20 trillion pesos.'
Polluting on the public dole.
Bogotá's traffic congestion costs all of us everyday: In stress, pollution, lost time and damaged hearing. However, now El Tiempo reports that every one who pays taxes here is subsidizing every one of those cars, buses and trucks.

A recent report by the government's Mining & Energy Planning Unit calculated that between 2008 and August 2014, Colombia spent 20 trillion pesos subsidizing gasoline and diesel fuels. That's as much money as it plans to spend on the National Development Plan (PND) between 2014 and 2018.

Should Colombia really subsidize this?
There are economic and social justification for subsidizing buses and other mass transit. But I can think of lots better ways to do that than handing out subsidized diesel, which also subsidizes beer trucks owned by Colombia's wealthiest men, those smog-belching buses and trucks on Colombia's roads and gas-guzzling SUVs bereft of emissions controls.

So, fuel subsidies are not only terrible for the economy, but also an inequitable shift of money that should help the poor, to wealthy car and truck owners. Fuel subsidies are bad for cities, for the environment and the economy. But the government fears the protests which raising the price brings.

I can't help observing that, as destructive as Colombia's subsidy is, it's tiny compared to neighboring Venezuela, which is driving itself bankrupt spending about 15% of its GDP subsidizing fuels down to a few cents per gallon.
Take a whiff of that subsidized smoke.
Idling away the nation's wealth.
By Mike Ceaser, of Bogotá Bike Tours

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