Misplaced Pages

#515484

115-414: In total, 453 people died and 52,000 people were injured or displaced. Thirty-eight communities were destroyed, with 250,000 acres (100,000 ha) burned, and $ 73 million ($ 1.479 billion in 2024 United States dollars) in property damage; $ 13 million in federal aid was disbursed. Carlton County was known for its logging industry during the early 20th century. The fire burned over dry, harvested land that

230-422: 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. Deforestation Deforestation or forest clearance is the removal and destruction of a forest or stand of trees from land that

345-833: A 3.2% rise in global deforestation. Massive wildfires in Canada , exacerbated by climate change , contributed to a 24% increase in global tree cover loss, highlighting the ongoing threats to forests essential for carbon storage and biodiversity . Despite some progress, the overall trends in forest destruction and climate impacts remain off track. The IPCC Sixth Assessment Report stated in 2022: “Over 420 million ha of forest were lost to deforestation from 1990 to 2020; more than 90% of that loss took place in tropical areas (high confidence), threatening biodiversity, environmental services, livelihoods of forest communities and resilience to climate shocks (high confidence).” See also: Global deforestation sharply accelerated around 1852. As of 1947,

460-1008: A cellar between Moose Lake and Kettle River. Among other structures, the Duluth Country Club and the Children's Home were both complete losses. Within Carlton and southern Saint Louis Counties, the towns of Brookston , Arnold , and Moose Lake were completely destroyed. Cloquet and its surrounding cities were known for the great deforestation caused by the fire. The fires left thousands of people homeless. About 4,700 Cloquet residents sought refuge in Duluth, Minnesota, and Superior, Wisconsin . In total, close to 12,000 people were left homeless from neighboring towns. The inferno's victims were temporarily sheltered in buildings such as hospitals, schools, churches, armories, and private homes. Doctors were brought in from surrounding areas to help

575-405: 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. Adam Smith observed that special government subsidies enabled exporters to sell abroad at substantial ongoing losses. He did not regard that as

690-496: 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

805-443: A domestic and international level. On a domestic level, subsidies affect the allocation decision of domestic resources, income distribution , and expenditure productivity. On an international level, subsidies may increase or decrease international interaction and integration through trade. For this reason, having a thorough subsidy policy is essential as its inadequacy can potentially lead to financial hardship and problems for not only

920-470: A glut of renewable energy projects and an oversupply of energy in the market. This, in turn, can lead to lower prices for energy and financial losses for investors. In addition, tax subsidies can be difficult to monitor and enforce, which can lead to abuse and fraud. Companies may claim tax breaks for activities that do not qualify, or may use complex legal structures to shift profits to lower tax jurisdictions. This can result in lost revenue for governments and

1035-424: A good or service may lead to an increase in revenue for producers earned from the heightened demand by consumers. The use of indirect subsidies such as price controls is widespread among developing economies and emerging markets as a necessary tool for social policy. It has proven to be effective in many cases but price controls have a potential to dampen investment activity and growth, cause heavy fiscal burdens for

1150-471: A lack of fairness in the tax system. Despite these concerns, tax subsidies remain a popular tool for governments to promote various policy objectives, such as economic growth, job creation, and environmental sustainability . The use of tax subsidies is often debated in political circles, with some arguing that they are necessary to support certain industries or to incentivize certain behaviors, while others argue that they create inefficiencies and distortions in

1265-453: A lower sales tax on natural gas for residential heating ; or subsidies on production , such as tax breaks on exploration for oil . Or they may be free or cheap negative externalities ; such as air pollution or climate change due to burning gasoline , diesel and jet fuel . Some fossil fuel subsidies are via electricity generation , such as subsidies for coal-fired power stations . Eliminating fossil fuel subsidies would reduce

SECTION 10

#1732780479516

1380-492: A reduction in the market price of goods and services. They are commonly used by governments of many developing countries in an attempt to secure the most basic needs for its population. 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

1495-400: 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

1610-555: A sense of historical right to them. 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

1725-581: A single incident. It had two major theaters, one called the Cloquet–Duluth Fire and the other the Moose Lake Fire. The Cloquet–Duluth Fire began before noon on October 10 when a Great Northern locomotive ignited a small fire at Milepost 62 northwest of Cloquet. It smoldered for two days, then came alive when a cold front brought stiff winds and a steep drop in humidity. At about 1:30 p.m. this fire began to move and joined with others. It reached

1840-532: A sound and sustainable policy. That was because "… under normal industrial-commercial conditions their own interests soon oblige loss-making businesses to deploy their capital in other ways – or to move into markets where the sales prices do cover the supply costs and yield ordinary profits. Like other mercantilist schemes and devices, export bounties are a means of trying to force business capital into channels it would not naturally enter. The schemes are invariably costly and damaging in various ways." An import subsidy

1955-635: 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

2070-408: A specified individual or household. Popular examples includes cash grants and interest-free loans. Subsidies can also be classified as indirect when they do not involve actual payments. An example would be an increase in disposable income arising from a decrease in price of an essential good or service that the government has enforced in a form of monetary support. In contrast, a decrease in the price of

2185-432: 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

2300-477: A substantial part of the wages for retaining their employees or to create new jobs during severe recessions such as the 2008 GFC (Global Financial Crisis), there were minor impacts on employment during the first year. However, the subsidy began to yield positive effects on employment, particularly a decrease in the unemployment rate, in the second year as employers began to properly utilise the subsidy. Tax subsidies, also known as tax breaks or tax expenditures , are

2415-507: A temporary suspension following a crisis. Workers are prevented from losing their jobs and other associated employment benefits such as annual leave entitlements and retirement pensions. Employment subsidies allow individual beneficiaries a minimum standard of living at the very least. However, less than half of active jobseekers in around 50% of OECD countries receive unemployment support. The effect of employment subsidies may not be evident immediately. When employers received grants to subside

SECTION 20

#1732780479516

2530-443: A way for governments to achieve certain outcomes without directly providing cash payments. By offering tax breaks, the government can incentivize behavior that is beneficial to the economy or society as a whole. However, tax subsidies can also have negative consequences. One type of tax subsidy is a health tax deduction, which allows individuals or businesses to deduct their health expenses from their taxable income. This can be seen as

2645-581: A way to incentivize people to prioritize their health and well-being. However, it can also create distortions in the economy by encouraging people to spend more on health care than they otherwise would. Another type of tax subsidy is related to Intellectual Property . Base Erosion and Profit Shifting (BEPS) is a particular form of tax subsidy that involves companies shifting their profits to low-tax jurisdictions in order to reduce their overall tax burden. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting

2760-401: 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. Competitive equilibrium is a state of balance between buyers and suppliers, in which the quantity demanded of a good

2875-414: Is a treaty signed by half the nations of the world aimed at preventing this type of tax avoidance. While tax subsidies can be effective in achieving certain outcomes, they are also less transparent than direct cash payments and can be difficult to undo. Additionally, some argue that tax breaks disproportionately benefit the wealthy and large corporations, further exacerbating income inequality. Therefore, it

2990-407: Is agreement that destruction of rainforests remains a significant environmental problem. The rate of net forest loss declined from 7.8 million ha per year in the decade 1990–2000 to 5.2 million ha per year in 2000–2010 and 4.7 million ha per year in 2010–2020. The rate of decline of net forest loss slowed in the most recent decade due to a reduction in the rate of forest expansion. In many parts of

3105-636: Is agriculture by far. More than 80% of deforestation was attributed to agriculture in 2018. Forests are being converted to plantations for coffee , palm oil , rubber and various other popular products. Livestock grazing also drives deforestation. Further drivers are the wood industry ( logging ), urbanization and mining . The effects of climate change are another cause via the increased risk of wildfires (see deforestation and climate change ). Deforestation results in habitat destruction which in turn leads to biodiversity loss . Deforestation also leads to extinction of animals and plants, changes to

3220-407: Is also important for the agricultural sector. The reason for this linkage is because the effects of climate change on agriculture pose new risks to global food systems . Since 1990, it is estimated that some 420 million hectares of forest have been lost through conversion to other land uses , although the rate of deforestation has decreased over the past three decades. Between 2015 and 2020,

3335-758: Is around 38%. Since 1960, roughly 15% of the Amazon has been removed with the intention of replacing the land with agricultural practices. It is no coincidence that Brazil has recently become the world's largest beef exporter at the same time that the Amazon rainforest is being clear cut. Another prevalent method of agricultural deforestation is slash-and-burn agriculture , which was primarily used by subsistence farmers in tropical regions but has now become increasingly less sustainable. The method does not leave land for continuous agricultural production but instead cuts and burns small plots of forest land which are then converted into agricultural zones. The farmers then exploit

3450-472: Is given directly to consumers. 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

3565-445: Is important for governments to carefully consider the potential consequences of offering tax subsidies and ensure that they are targeted towards achieving the greatest public good. Furthermore, tax subsidies can have unintended consequences, such as creating market distortions that favor certain industries or companies over others. For example, if a government offers tax breaks to incentivize investment in renewable energy, it may lead to

Cloquet fire - Misplaced Pages Continue

3680-605: Is not an issue because of longer fallow periods and lesser overall deforestation. The relatively small size of the plots allowed for no net input of CO 2 to be released. Consumption and production of beef is the primary driver of deforestation in the Amazon , with around 80% of all converted land being used to rear cattle. 91% of Amazon land deforested since 1970 has been converted to cattle ranching. Livestock ranching requires large portions of land to raise herds of animals and livestock crops for consumer needs. According to

3795-585: Is now ", the OECD suggests that countries make better use of environmental taxation, phase out agricultural subsidies and environmentally harmful tax breaks. In the Netherlands, audits are performed to verify whether the funds that have been received has indeed been spent legally (and all requirements of the subsidy provider have been attained), for the purpose intended. It hence prevents fraud . Although subsidies can be important, many are " perverse ", in

3910-402: 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

4025-453: Is projected to occur by the mid-21st century. In the early 2000s, some scientists predicted that unless significant measures (such as seeking out and protecting old growth forests that have not been disturbed) are taken on a worldwide basis, by 2030 there will only be 10% remaining, with another 10% in a degraded condition . 80% will have been lost, and with them hundreds of thousands of irreplaceable species. Estimates vary widely as to

4140-727: Is responsible for 48% of deforestation; commercial agriculture is responsible for 32%; logging is responsible for 14%, and fuel wood removals make up 5%. More than 80% of deforestation was attributed to agriculture in 2018. Forests are being converted to plantations for coffee, tea, palm oil , rice, rubber , and various other popular products. The rising demand for certain products and global trade arrangements causes forest conversions , which ultimately leads to soil erosion . The top soil oftentimes erodes after forests are cleared which leads to sediment increase in rivers and streams. Most deforestation also occurs in tropical regions. The estimated amount of total land mass used by agriculture

4255-406: 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

4370-402: Is the quantity supplied at a specified price. When the price falls the quantity demand exceeds the equilibrium quantity, 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

4485-403: Is then converted to non-forest use. Deforestation can involve conversion of forest land to farms , ranches , or urban use. About 31% of Earth's land surface is covered by forests at present. This is one-third less than the forest cover before the expansion of agriculture, with half of that loss occurring in the last century. Between 15 million to 18 million hectares of forest, an area

4600-408: 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

4715-560: The Congolese rainforest increased by 5%. The World Wildlife Fund 's ecoregion project catalogues habitat types throughout the world, including habitat loss such as deforestation, showing for example that even in the rich forests of parts of Canada such as the Mid-Continental Canadian forests of the prairie provinces half of the forest cover has been lost or altered. In 2011, Conservation International listed

Cloquet fire - Misplaced Pages Continue

4830-730: The Philippines , Indonesia , Thailand , Burma , Malaysia , Bangladesh , China, Sri Lanka , Laos , Nigeria , the Democratic Republic of the Congo , Liberia , Guinea , Ghana and the Ivory Coast , have lost large areas of their rainforest. Much of what remains of the world's rainforests is in the Amazon basin , where the Amazon Rainforest covers approximately 4 million square kilometres. Some 80% of

4945-911: The Red Cross . Cloquet suffered significantly more damage than Duluth, and the recovery was much slower there and much larger in scale. On October 20, Cloquet citizens met in Carlton County to talk about what needed to be done. Secondary industries included the Northwest Paper Company, the Cloquet Tie and Post Company, the Berst-Forster-Dixfield Company toothpick factory, and the Rathborne, Hair and Ridgeway Company box factory. These secondary industries eventually ascended to be primary industries, but

5060-479: The World Wildlife Fund , "Extensive cattle ranching is the number one culprit of deforestation in virtually every Amazon country, and it accounts for 80% of current deforestation." The cattle industry is responsible for a significant amount of methane emissions since 60% of all mammals on earth are livestock cows. Replacing forest land with pastures creates a loss of forest stock , which leads to

5175-407: The health risks of air pollution , and would greatly reduce global carbon emissions thus helping to limit climate change . As of 2021 , policy researchers estimate that substantially more money is spent on fossil fuel subsidies than on environmentally harmful agricultural subsidies or environmentally harmful water subsidies . The International Energy Agency says: "High fossil fuel prices hit

5290-1922: 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. Energy subsidies are measures that keep prices for customers below market levels, or for suppliers above market levels, or reduce costs for customers and suppliers. Energy subsidies may be direct cash transfers to suppliers, customers, or related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates , price controls , trade restrictions , and limits on market access . During FY 2016–22, most US federal subsidies were for renewable energy producers (primarily biofuels, wind, and solar), low-income households, and energy-efficiency improvements. During FY 2016–22, nearly half (46%) of federal energy subsidies were associated with renewable energy, and 35% were associated with energy end uses. Federal support for renewable energy of all types more than doubled, from $ 7.4 billion in FY 2016 to $ 15.6 billion in FY 2022. Fossil fuel subsidies are energy subsidies on fossil fuels , and in 2023 totalled over 1 trillion dollars. They may be tax breaks on consumption , such as

5405-584: The Fond du Lac Ojibwe reservation around 7:15 and the city of Cloquet around 8:00. Winds had by then risen to 60 mph or better. The Moose Lake fire—at least five fires combined—started on October 4 along railroad tracks near Tamarack in Aitkin County; it stayed small till the increasing winds and falling humidity of October 12 whipped it up early that afternoon. It burned southeast toward the towns of Kettle River and Moose Lake, combining with other fires along

5520-521: The Moose Lake member of the relief commission, told farmers, "We are going to put you back as well off as you were before." Relief assistance aided the farming community, and with the commission's help the farmers were given places to stay and the means to regain what they had lost. The Northwestern Telephone Company restored phone service by Sunday at approximately 7 p.m. The education of Moose Lake students resumed on January 6, 1919, with assistance from

5635-551: 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

5750-800: 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

5865-656: The aim of stabilizing the economy. It ensures that individuals and households are viable by having access to essential goods and services while giving businesses the opportunity to stay afloat and/or competitive. Subsidies not only promote long term economic stability but also help governments to respond to economic shocks during a recession or in response to unforeseen shocks, such as the COVID-19 pandemic . Subsidies take various forms— such as direct government expenditures, tax incentives , soft loans , price support , and government provision of goods and services. For instance,

SECTION 50

#1732780479516

5980-423: 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

6095-399: The boilers all the fuel they could stand. Early reports of the fire circulated rumors that the fires had been intentionally started by "enemy agents", but Cloquet Fire Chief F. J. Longren later confirmed that such rumors were false. One cause of the fire was reportedly sparks from the railroad tracks that lit grass and dry timber, but the rapid progression of the fire through northern Minnesota

6210-642: The commodity is consumed. For example, consumption patterns in G7 countries are estimated to cause an average loss of 3.9 trees per person per year. In other words, deforestation can be directly related to imports—for example, coffee. In 2023, the Global Forest Watch reported a 9% decline in tropical primary forest loss compared to the previous year, with significant regional reductions in Brazil and Colombia overshadowed by increases elsewhere, leading to

6325-407: The conversion of forest to other land uses (regardless of whether it is human-induced). Deforestation and forest area net change are not the same: the latter is the sum of all forest losses (deforestation) and all forest gains (forest expansion) in a given period. Net change, therefore, can be positive or negative, depending on whether gains exceed losses, or vice versa. The FAO estimates that

6440-478: The country's western regions at a rate of 15,000 hectares at a randomly studied 2-month period in 2010. In 2009, Paraguay's parliament refused to pass a law that would have stopped cutting of natural forests altogether. As of 2007, less than 50% of Haiti's forests remained . From 2015 to 2019, the rate of deforestation in the Democratic Republic of the Congo doubled. In 2021, deforestation of

6555-780: The decades 1990–2000 and 2000–2010. Some claim that rainforests are being destroyed at an ever-quickening pace. The London-based Rainforest Foundation notes that "the UN figure is based on a definition of forest as being an area with as little as 10% actual tree cover, which would therefore include areas that are actually savanna-like ecosystems and badly damaged forests". Other critics of the FAO data point out that they do not distinguish between forest types, and that they are based largely on reporting from forestry departments of individual countries, which do not take into account unofficial activities like illegal logging. Despite these uncertainties, there

6670-452: 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 in the price for the goods in their market, while on the other side, the exporters of the producing country experience an increase in well-being due to

6785-498: The deforestation of the Amazon can be attributed to cattle ranching, as Brazil is the largest exporter of beef in the world. The Amazon region has become one of the largest cattle ranching territories in the world. The regions with the highest tropical deforestation rate between 2000 and 2005 were Central America —which lost 1.3% of its forests each year—and tropical Asia. In Central America , two-thirds of lowland tropical forests have been turned into pasture since 1950 and 40% of all

6900-568: 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." The first important classification of subsidies are direct and indirect subsidies. Subsidies are categorised as direct when it involves actual cash outlays targeted towards

7015-492: The economy flourished. On October 10, 1918, two men working near a railroad siding northwest of Cloquet saw a passenger train pass by the siding, and soon thereafter discovered a fire burning through grass and piles of wood. The fire could not be contained, and by October 12, it and other fires had spread through northern Minnesota. What is often called simply the Cloquet Fire was really 50 or more fires that combined in

SECTION 60

#1732780479516

7130-661: The economy. In conclusion, tax subsidies are a powerful tool for governments to achieve policy goals, but they come with their own set of challenges and limitations. It is important for policymakers to carefully consider the potential unintended consequences of tax subsidies and to design them in a way that maximizes their benefits while minimizing their costs. Additionally, strong monitoring and enforcement mechanisms are needed to ensure that tax subsidies are used appropriately and do not result in abuse or fraud. Some governments subsidise transport, especially rail and bus transport, which decrease congestion and pollution compared to cars. In

7245-463: The extent of deforestation in the tropics. In 2019, the world lost nearly 12 million hectares of tree cover. Nearly a third of that loss, 3.8 million hectares, occurred within humid tropical primary forests, areas of mature rainforest that are especially important for biodiversity and carbon storage. This is equivalent to losing an area of primary forest the size of a football pitch every six seconds. A 2002 analysis of satellite imagery suggested that

7360-411: 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 . 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

7475-535: 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. As a housing policy tool, housing subsidies also help low income individuals gain and maintain liveable residency by easing the cost burdens of housing for low income individuals and households. However, some policy makers and experts believe they are costly to implement and may even reduce incentives for beneficiaries to participate in

7590-453: The fire, which they were unable to do despite their best efforts. After torrents of flame battered them down, they instead began to focus on the survivors. Commanding Officer Roger M. Weaver of the 3rd Battalion realized the worsening severity of the situation. By 5:40 p.m., he had called on Weaver and his men, who prepared for action. Scores of men assembled in less than an hour and were then dispatched to several hazard sites to help extinguish

7705-522: The fire. The firefighters' efforts saved several important structures, among them the St. James Catholic Orphanage and the Nopeming Sanatorium. The sanatorium, valued at $ 350,000 at the time, held close to 200 tuberculosis patients. A party of automobiles broke through walls of flames to save the patients. The Minnesota Home Guard assumed management of the aftermath. The recovery of the region

7820-623: The firms but also produce some positive externalities such that it benefits the industry in which the firms belong, and most importantly, the society at large. Although commonly extended from the government, the term subsidy can relate to any type of support – for example from NGOs or as implicit. 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

7935-407: 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

8050-432: The form of charcoal or timber ), while cleared land is used as pasture for livestock and agricultural crops. The vast majority of agricultural activity resulting in deforestation is subsidized by government tax revenue . Disregard of ascribed value, lax forest management , and deficient environmental laws are some of the factors that lead to large-scale deforestation. The types of drivers vary greatly depending on

8165-464: The form of untaxed environmental externalities . These externalities include things such as pollution from vehicle emissions, pesticides , or other sources. A 2015 report studied the implicit subsidies accruing to 20 fossil fuel companies. It estimated that the societal costs from downstream emissions and pollution attributable to these companies were substantial. The report spans the period 2008–2012 and notes that: "for all companies and all years,

8280-568: The global forest carbon stock has decreased 0.9%, and tree cover 4.2% between 1990 and 2020. As of 2019 there is still disagreement about whether the global forest is shrinking or not: "While above-ground biomass carbon stocks are estimated to be declining in the tropics, they are increasing globally due to increasing stocks in temperate and boreal forest. Deforestation in many countries —both naturally occurring and human-induced —is an ongoing issue. Between 2000 and 2012, 2.3 million square kilometres (890,000 square miles) of forests around

8395-675: The government may distribute direct payment subsidies to individuals and households during an economic downturn in order to help its citizens pay their bills and to stimulate economic activity. Here, subsidies act as an effective financial aid issued when the economy experiences economic hardship. They can also be a good policy tool to revise market imperfections when rational and competitive firms fail to produce an optimal market outcome. For example, in an imperfect market condition, governments can inject subsidies to encourage firms to invest in R&;D (research and development). This will not only benefit

8510-639: The government, and may even complicate the optimal performance of monetary policy. To prevent the undesirable negative effects, price control regimes may be replaced by creating social safety nets and proposing sound reforms to encourage competition and growth. Another important classification of subsidies are producer/production subsidies and consumer/consumption subsidies. Production subsidies are designed to ensure producers are advantaged by creating fluid market activity through other market control mechanisms or by providing cash payments for factors of production. Consumption subsidies benefit consumers typically through

8625-549: The help of the Red Cross and dedicated townspeople. Within five years, Cloquet had industrialized and rebuilt many of the lost railroads, and the citizens had moved from their Red Cross shelters into new houses. Many memorials commemorate the 1918 fire. A 27-foot monument near Duluth memorializes the 453 lives lost. The Moose Lake Area Historical Society annually honors the lives lost at the Soo Line Depot , which in 1995

8740-402: The implication of increased greenhouse gas emissions by burning agriculture methodologies and land-use change . A large contributing factor to deforestation is the lumber industry . A total of almost 4 million hectares (9.9 million acres) of timber, or about 1.3% of all forest land, is harvested each year. In addition, the increasing demand for low-cost timber products only supports

8855-442: 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 or wage subsidies keep the employment relationship ongoing even during financial crisis. It is particularly beneficial for enterprises to recover quickly after

8970-415: The labour market. In the contrary, certain literatures have found that subsidy cuts do not encourage employment or participation among beneficiaries. For example, research by Daniel Borbely found that reducing housing subsidies did not increase employment and labour force participation. Though, he also added that claimants relocated to other areas of the rental market to maintain their benefits. Nonetheless,

9085-425: The lake on the logs covering the water's surface. With a new century approaching, open lands in Carlton County were overrun by farmers purchasing land from the mill. The mill's main incentives for sales to farmers were the government grants on the land. With more farmers arriving each year, the population and activity in Carlton County grew substantially. Stores, lawyers, and livestock businesses were established and

9200-702: The largest annual rate of net forest loss in 2010–2020, at 3.9 million ha, followed by South America, at 2.6 million ha. The rate of net forest loss has increased in Africa in each of the three decades since 1990. It has declined substantially in South America, however, to about half the rate in 2010–2020 compared with 2000–2010. Asia had the highest net gain of forest area in 2010–2020, followed by Oceania and Europe. Nevertheless, both Europe and Asia recorded substantially lower rates of net gain in 2010–2020 than in 2000–2010. Oceania experienced net losses of forest area in

9315-483: The local climate, and displacement of indigenous people who live in forests. Deforested regions often also suffer from other environmental problems such as desertification and soil erosion . Another problem is that deforestation reduces the uptake of carbon dioxide ( carbon sequestration ) from the atmosphere. This reduces the potential of forests to assist with climate change mitigation . The role of forests in capturing and storing carbon and mitigating climate change

9430-430: The main driver of deforestation and forest fragmentation and the associated loss of forest biodiversity. Large-scale commercial agriculture (primarily cattle ranching and cultivation of soya bean and oil palm) accounted for 40 percent of tropical deforestation between 2000 and 2010, and local subsistence agriculture for another 33 percent. Trees are cut down for use as building material, timber or sold as fuel (sometimes in

9545-505: The most common method for providing housing subsidies is via direct payments to renters by covering a part of their rent on the private rent market. This method of direct transfer of housing subsidies is often referred to as "housing vouchers". In the United States, the so-called Section 8 is a direct payment program subsidising the largest amount of money to renters for rental assistance. While conventional subsidies require financial support, many economists have described implicit subsidies in

9660-460: The nutrients in the ashes of the burned plants. As well as, intentionally set fires can possibly lead to devastating measures when unintentionally spreading fire to more land, which can result in the destruction of the protective canopy. The repeated cycle of low yields and shortened fallow periods eventually results in less vegetation being able to grow on once burned lands and a decrease in average soil biomass. In small local plots sustainability

9775-566: The original 16 million square kilometres (6 million square miles) of tropical rainforest that formerly covered the Earth. More than 3.6 million hectares of virgin tropical forest was lost in 2018. The global annual net loss of trees is estimated to be approximately 10 billion. According to the Global Forest Resources Assessment 2020 the global average annual deforested land in the 2015–2020 demi-decade

9890-418: The other hand, a 2005 analysis of satellite images reveals that deforestation of the Amazon rainforest is twice as fast as scientists previously estimated. From 2010 to 2015, worldwide forest area decreased by 3.3 million ha per year, according to FAO . During this five-year period, the biggest forest area loss occurred in the tropics, particularly in South America and Africa. Per capita forest area decline

10005-410: The planet had 15 to 16 million km (5.8 to 6.2 million sq mi) of mature tropical forests , but by 2015, it was estimated that about half of these had been destroyed. Total land coverage by tropical rainforests decreased from 14% to 6%. Much of this loss happened between 1960 and 1990, when 20% of all tropical rainforests were destroyed. At this rate, extinction of such forests

10120-443: The poor hardest, but subsidies are rarely well-targeted to protect vulnerable groups and tend to benefit better-off segments of the population." 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

10235-418: The poor or low income individuals but the aggregate economy as a whole. At large, subsidies take up a substantial portion of the government and economy. Amongst OECD countries in 2020, the median of subsidies and other transfers such as social benefits and non-repayable transfers to private and public enterprises was 56.3 percent of total government expenses which was 34.9 percent (weighted average) of GDP in

10350-505: 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

10465-612: 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. All countries use subsidies via national and sub-national entities through different forms such as tax incentives and direct grants. Likewise, subsidies have an economic influence on both

10580-492: The rainforests have been lost in the last 40 years. Brazil has lost 90–95% of its Mata Atlântica forest. Deforestation in Brazil increased by 88% for the month of June 2019, as compared with the previous year. However, Brazil still destroyed 1.3 million hectares in 2019. Brazil is one of several countries that have declared their deforestation a national emergency. Paraguay was losing its natural semi-humid forests in

10695-472: The rate of deforestation in the humid tropics (approximately 5.8 million hectares per year) was roughly 23% lower than the most commonly quoted rates. A 2005 report by the United Nations Food and Agriculture Organization (FAO) estimated that although the Earth's total forest area continued to decrease at about 13 million hectares per year, the global rate of deforestation had been slowing. On

10810-404: The rate of deforestation was estimated at 10 million hectares per year, down from 16 million hectares per year in the 1990s. The area of primary forest worldwide has decreased by over 80 million hectares since 1990. More than 100 million hectares of forests are adversely affected by forest fires, pests, diseases, invasive species , drought and adverse weather events. Deforestation is defined as

10925-500: The recovery of the primary industries was far more complex. The Northern Lumber Company, responsible for a significant proportion of Cloquet's economy, had been destroyed. The Northwest Paper Company began production a week after the fire and gave Cloquet's citizens much-needed jobs. The Red Cross stepped in and constructed many temporary shelters for the victims' families in Cloquet. By November 15, over 200 shelters had been built with

11040-476: The region in which they take place. The regions with the greatest amount of deforestation for livestock and row crop agriculture are Central and South America, while commodity crop deforestation was found mainly in Southeast Asia. The region with the greatest forest loss due to shifting agriculture was sub-Saharan Africa. The overwhelming direct cause of deforestation is agriculture. Subsistence farming

11155-445: The same year. Yet, the number of subsidy measures in force have been rapidly increasing since 2008. 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

11270-487: 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

11385-506: The six most subsidised sectors alone (agriculture, fossil fuels, road transportation, water, fisheries and forestry). 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

11500-461: The size of Bangladesh , are destroyed every year. On average 2,400 trees are cut down each minute. Estimates vary widely as to the extent of deforestation in the tropics . In 2019, nearly a third of the overall tree cover loss, or 3.8 million hectares, occurred within humid tropical primary forests . These are areas of mature rainforest that are especially important for biodiversity and carbon storage . The direct cause of most deforestation

11615-522: The size of India—by 2050. 36% of globally planted forest area is in East Asia – around 950,000 square kilometers. From those 87% are in China. Rates of deforestation vary around the world. Up to 90% of West Africa 's coastal rainforests have disappeared since 1900. Madagascar has lost 90% of its eastern rainforests. In South Asia , about 88% of the rainforests have been lost. Mexico , India ,

11730-489: 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

11845-401: 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,

11960-885: The thousands of injured people. Several organizations and volunteers risked their lives to help save people and property. The Minnesota Infantry National Guard was called in to help in the relief process. At about 3 p.m. on October 12, Lieutenant Karl A. Franklin and Captain Henry Tourtelotte of the Fourth Regiment of the National Guard were contacted to aid the Rice Lake Road area. After speaking with Cloquet's mayor and its police chief, Robert McKercher, Tourtelotte and nine other people headed for Duluth to assemble his troops and offer immediate assistance. A couple of companies were assigned to controlling

12075-467: The top 10 most endangered forests, characterized by having all lost 90% or more of their original habitat , and each harboring at least 1500 endemic plant species (species found nowhere else in the world). As of 2015 , it is estimated that 70% of the world's forests are within one kilometer of a forest edge, where they are most prone to human interference and destruction. Deforestation in particular countries: Agricultural expansion continues to be

12190-437: The townspeople would have to flee ... The scene at the station was indescribable. There came a rush of wind and the entire town was in flames. The trains pulled out with the fires blazing closely behind them. Women wept and clung to their children, while others cried frantically for their missing ones. The flames licked at the cars. Windows in the coaches were broken by the heat. The engineers and firemen alternately stoked, to give

12305-528: The way. As the fire neared Moose Lake around 7:30 that evening, relief trains rescued a few hundred people. Most who survived, however, did so by taking refuge in Moose Head Lake. When asked about the scene at Cloquet, Albert Michaud, a special police officer in Cloquet, was quoted by the New York Times , At 6 o'clock last night, a forest ranger gave warning that unless the wind died down

12420-473: The world were cut down. Deforestation and forest degradation continue to take place at alarming rates, which contributes significantly to the ongoing loss of biodiversity . Deforestation is more extreme in tropical and subtropical forests in emerging economies. More than half of all plant and land animal species in the world live in tropical forests . As a result of deforestation, only 6.2 million square kilometres (2.4 million square miles) remain of

12535-576: The world, especially in East Asian countries, reforestation and afforestation are increasing the area of forested lands. The amount of forest has increased in 22 of the world's 50 most forested nations. Asia as a whole gained 1 million hectares of forest between 2000 and 2005. Tropical forest in El Salvador expanded more than 20% between 1992 and 2001. Based on these trends, one study projects that global forestation will increase by 10%—an area

12650-456: Was 10 million hectares and the average annual forest area net loss in the 2000–2010 decade was 4.7 million hectares. The world has lost 178 million ha of forest since 1990, which is an area about the size of Libya. An analysis of global deforestation patterns in 2021 showed that patterns of trade, production, and consumption drive deforestation rates in complex ways. While the location of deforestation can be mapped, it does not always match where

12765-461: Was also greatest in the tropics and subtropics but is occurring in every climatic domain (except in the temperate) as populations increase. An estimated 420 million ha of forest has been lost worldwide through deforestation since 1990, but the rate of forest loss has declined substantially. In the most recent five-year period (2015–2020), the annual rate of deforestation was estimated at 10 million ha, down from 12 million ha in 2010–2015. Africa had

12880-453: Was area-specific because of the damage inflicted. The damage that Duluth sustained was unlikely to affect the economy—although the fire did destroy several small suburbs and farming communities—since most of Duluth's economy at the time centered on transportation and mining, which were relatively unaffected. The farming industry, though, suffered great losses. Numerous livestock were killed and many acres of farmland were torched. Charles Mahnke,

12995-409: Was caused by numerous factors, such as drought conditions, high winds, and a lack of firefighting equipment. Many instances of mass deaths were reported. In Moose Lake, an Associated Press correspondent reported seeing 75 bodies piled in a burned building. On a road leading out of Moose Lake, 100 bodies were strewn, according to the New York Times . A relief worker reported that 30 bodies were piled in

13110-437: Was opened as a railroad and fire museum. The Soo Line Depot is both a fire and railroad museum that exhibits the history of the railroads and the story of the fire. 46°35′N 92°34′W  /  46.583°N 92.567°W  / 46.583; -92.567 Subsidy A subsidy , subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with

13225-419: Was vulnerable to wildfire. The logging industry employed most of the area workforce. The railroad, which came to the area in 1870, was a great boost for the logging industry. In 1874, a large lumber mill was built alongside the lakeshore. The mill along the river gathered and floated logs downriver, where they were assembled and sawed for retail. When the logging industry was at its peak, one could walk across

#515484