[js8]

The truth is, when it comes to negative externalities (like CO2, for instance), government just loves to give out subsidies rather than to create taxes. In economic theory, taxes (which can be then refunded to citizens as dividends), not subsidies (which require to leave the decision on the government instead of free market), are the correct solution to the externality problem. But in practice, regulatory capture and the general hate of taxes cause this not to be implemented. (Although sometimes industrial subsidies can be useful, since markets can also fail and be too slow. Many industries were built faster on subsidies.)

[vanderZwan]

> government just loves to give out subsidies rather than to create taxes.

Doesn't take a expert to see why "we give you freebies if you do this" is an easier political sell than "we punish you if you keep doing that". So much of modern politics is based on risk management to the point of cowardice, including upsetting potential voters.

[ljm]

The problem with a negative incentive is that saying "don't do X" doesn't mean "actually do intended alternative Y instead."

Example: Volkswagen faking emissions tests.

And at least if someone cheats their way to a subsidy a government will probably have an easier time pursuing a case for fraud than they would for tax evasion or whatever.

[vanderZwan]

The example I gave is entirely legal as far as I understand, that was my point: there are gaint gaping holes in the regulations to exploit for people who don't actually care about the environment and only wish to maximize their profits.