A SCRUTINY OF THE MOTIVES FOR HARD COAL SUBSIDIES IN WESTERN-EUROPE

Security of energy supply, and employment considerations are frequentl y said to provide major justifications for the colossal subsidies to W est European coal production. This paper scrutinizes the validity of t he two motives. The production cut following from subsidy elimination would result in a very small change of West European energy self-suffi ciency, with doubtful repercussions on supply security. The impact on the region's employment would be barely perceptible. Germany stands ou t as the country that would be most heavily affected by coal subsidy e limination. Even in Germany, however, the public support expended on c oal could be put to much more efficient alternative use for the promot ion of energy supply security and employment creation, It is concluded that the two motives for coal support lack validity.