Germany has decided to phase out subsidies for the domestic coal industry over the next decade.
For decades, German lawmakers have propped up the industry, unwilling to risk massive layoffs and reluctant to eliminate a reliable energy source as gas and oil supplies become scarcer.
But after spending more than $200 billion in subsidies since the 1960s, the federal government this year decided that the practice had become unaffordable. The 2018 sunset for the hard-coal industry was set.
Economists and free-market lawmakers have long decried the subsidies as handouts to the politically influential coal industry and powerful trade unions. This year, for instance, Deutsche Steinkohle AG, the owner of the remaining eight mines, will receive more in government subsidies ($3.3 billion) than it will from selling coal ($2.9 billion).
With just 32,000 miners left, that’s the equivalent of more than $100,000 in annual subsidies per worker.
As bad as U.S. coal subsidies are (and I’d like to see them phased out too), Germany’s sound worse. At least U.S. coal companies are profitable.