The Politics of Subsidies to Coal Extraction in Colombia

Abstract

Coal mining, along with other extractive industries, is often presented by Colombian governments as one of the key sectors driving the country’s economic growth and sustaining regional development. Based on this justification, successive governments have offered various forms of subsidies to coal mining companies, from tax rebates to special security services. However, recent domestic debate about the institutional framework governing extractive industries has drawn some attention, albeit limited, to the special benefits provided to this sector, introducing questions about the legitimacy and effectiveness of such subsidies. This chapter explores the political dynamics behind subsidies to large-scale coal extraction in Colombia. After a brief overview of the socio-economic importance and challenges associated with coal production in Colombia, it describes some of the key subsidies that support coal extraction. It then explores how discursive, instrumental and institutional forms of power have been used by different actors to introduce, maintain and, in some cases, remove these subsidies. Two case studies – the Plan Vallejo and a royalty rebate – are briefly analysed in more detail.