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Biomass fossil-fuel subsidies vs renewable energy subsidies

Published on December 19th, 2013 | by Zachary Shahan

20

Fossil Fuels Get Half-A-Trillion-Dollar Christmas Present From Taxpayers

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December 19th, 2013 by Zachary Shahan 

Fossil fuels have dominated the global energy market and even the global economy for a long time. You would think that such mature industries wouldn’t need government subsidies — their annual revenue and profits are mind-boggling. However, with money comes power. And that money-power has a stranglehold on governments of the world such that it convinces governments to give them even more money in subsidies. Another recent study comes to the conclusion that the total annual subsidies fossil fuel companies get from governments in the developed world comes to about half a trillion dollars. This follows a 2010 study from the International Energy Agency that found fossil fuel industries got $550 billion in annual subsidies.

fossil-fuel subsidies vs renewable energy subsidies

It almost sounds like a joke — some of the richest companies in the world get $500 billion in government handouts. Just picture the rich, old, white men laughing their buns off about the way they have the most powerful governments in the world wrapped around their pinky fingers… or at least wrapped around the fingers that sign checks for our politicians’ election campaigns.

The latest study on this matter, Time to change the game, finds that the average resident of the world’s richest countries donates $112 a year to fossil fuel companies in the form of subsidies.

subsidies-spending

What are those subsidies for?

Well, as a press release about the new study notes, “these subsidies create perverse incentives favouring investment in carbon-intensive energy.” Yep, we’re encouraging the use of fossil fuels that harm our health, our climate, and our environment rather than using that money to transition away from these harmful sources and towards a truly clean energy economy.

aid


The proposal from study author Shelagh Whitley is that G20 nations phase out fossil fuel subsidies completely by 2020. Whitley states:

The rules of the game are currently biased in favour of fossil fuels.

The status quo encourages energy companies to continue burning high-carbon fossil fuels and offers no incentive to change. We’re throwing money at policies that are only going to make the problem worse in the long run by locking us into dangerous climate change.

social-costs fossil fuels

Here are just a few of the staggering statistics from Time to change the game:

  • The average subsidy provided by rich governments for every tonne of carbon is $7. This is the same as the current cost of carbon in the EU carbon trading system – meaning the carbon price may as well not exist.
  • Domestic subsidies in rich countries outstrip international climate finance provided to help address climate change in developing countries by a ratio of 7:1.
  • In some countries – India, Pakistan and Bangladesh – fossil fuel subsidies are more than double the level of spending on health services.
  • In countries such as Egypt, Pakistan, Morocco and Bangladesh, fossil fuel subsidies outweigh the national fiscal deficit.

emissions

Yep, you’ve got coal in your stocking, thanks to subsidies that have no place in a free market. Oddly, “free market idealists” never seem to complain about this matter.

Notably, G20 countries have agreed to phase out fossil fuel subsidies, with leadership on this matter actually coming from President Obama. An agreement made in September regarding the methodology for a new peer-review process of evaluating fossil fuel subsidies. This followed a 2009 agreement to phase out such subsidies. Obviously, though, they aren’t rushing through the process… 4 years and we’ve got an agreement on a peer-review process?

For more uplifting fossil fuel info, check out: Top 10 Toxic Ingredients Used In The Fossil Fuel Industries.

All images via the Overseas Development Institute

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About the Author

spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



  • Hillary

    “Rich old white men laughing their buns off”? Do you expect anyone to consider your article credible with statements like that? You keep referring to “subsides” but dont say what they are. Do you know? Poorly written, but your graphics are pretty cool though.

    • Bob_Wallace

      Click on the links to get specifics about the subsidies for fossil fuels.

  • 10th Amendment is the Solution

    cry, lefty, cry
    based on your report, way too much money is being wasted on economic losers: renewable energy…but, I guess renewables have one positive trait; that is if you hate bald eagles.

    • A Real Libertarian

      So apparently Left-Wingers hate crony capitalism, foreign wars, special exemptions from the law, personal irresponsibility and forced dependence on large centralized collectives.

      Huh, is this another one of those “slavery is freedom” things the right is so well known for?

  • Mike

    I noticed you were real slim listing the specific subsidies. Might help knowing what they are if you want people to oppose them.

    • drkennethnoisewater

      Indeed, and the cost-per-barrel as well, especially of the military subsidies.

    • http://zacharyshahan.com/ Zachary Shahan

      There are multiple reports on the matter. They note the specific subsidies.

  • Sky Bri

    Actually, some of your attacks on oil or fossil fuel related businesses is misguided. Some of the largest energy companies… ie… BP, Shell and others deploy capital into renewable energy- through research, foundations, universities, endowments and joint ventures. They are aware of the pr aspect as much as anyone.. ExxonMobil of all companies has invested hundreds of millions in ventures researching algae biofuel. … Who woulda thunk it? Check it out! Today’s “old white guys” were yesterday’s “young white guys”.

    • Bob_Wallace

      More precisely, they dabble.

      One should not be surprised that big fossil is getting a bit involved in renewables. Even as they fight against renewables.

      Big fossil knows that renewables are likely to destroy their traditional income streams. At some point they will need to move to a different product. In the meantime, the more they can retard the transition away from fossil fuels, the more money they can make.

    • mds

      Even more precisely, their involvement is just for show. Prove me wrong. BP, Shell, ExxonModil are making BILLIONS. Show me a few examples where they are investing in a way that is helping to scale up Solar PV, Wind, Power Storage, or EVs/PHEVs in any meaningful way. These are the technologies that are going to really change things. Algae biofuel will help too, but what are they doing to scale its production? These oil companies, rich welfare kings, are not helping the transition to clean renewables in any meaningful way.
      This is what they ARE doing:
      http://phys.org/news/2013-12-koch-brothers-reveals-funders-climate.html – December 2013
      “Not just the Koch brothers: New study reveals funders behind the climate change denial effort”

      You are defending immoral and gluttonous thieves! I object!

  • Will E

    my house is one year fossil free. solar and heat pump easy to install and paid for. saves me 3000 euros a year. next year a EV saves me again 3000 euros a year.
    makes 6000 euros is 8400 us dollars a year.
    how come people do not see this money making transition.

    • http://zacharyshahan.com/ Zachary Shahan

      i don’t know, tbh. people avoid math and don’t think about their purchases rationally. :D

      • Otis11

        That and Americans are bad at investing up front to gain future rewards… really, really bad. Typically to the point that if it won’t pay back before their next pay check, they don’t want to listen.

        • http://zacharyshahan.com/ Zachary Shahan

          Exactly.

          • http://zacharyshahan.com/ Zachary Shahan

            But not only Americans…

  • mtracy9

    I don’t expect we’ll be seeing this story on
    “fair and balanced” Fox Noise anytime soon.

    • 10th Amendment is the Solution

      cry, cry, cry…

  • mark

    Without the subsidies, would these companies be claiming profits? If an individual recieves subsidies they are classified as a welfare case. In the US, aren’t corporations now considered individuals?

    • 10th Amendment is the Solution

      cry, cry cry…
      ….I don’t have time for you, I have to go recover my dead mama eagle…it looks like her chicks are gonna die too…boo hoo

      • A Real Libertarian

        So you support welfare leeches too?

        Typical capitalist.

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