Clean Power

Published on February 8th, 2013 | by Chelsea


Fossil Fuel Subsidies Are Public Enemy Number One, Says IEA

February 8th, 2013 by  

International Energy Agency (IEA) Chief Economist Fatih Birol made no bones about his opinion on fossil fuel subsidies at the European Wind Energy Association conference this year. Birol said that “[f]ossil fuel subsidies are public enemy number one for green energy.”

Birol delivered a direct message to governments that continuing tax breaks for fossil fuels companies doesn’t make sense because renewable energies can’t compete with artificially cheap oil and gas, making it impossible to meet climate change targets.

To contend with the charge that renewable resources are too intermittent to replace fossil fuels, Birol asserted that political instability is the real culprit holding green tech back.

Birol called for “governments around the world” to end the $500 billion in annual subsidies that are given to oil and gas production (not to mention the additional subsidies given in the form of permitted externalities), according to Business Green.

Unfortunately, Birol realizes the unlikelihood of governments totally abandoning fossil fuel subsidies in the near future, especially in light of the spike in oil prices after the Arab Spring.

Understanding the true nature of subsidies is a tricky thing. Need some additional reading? Look no further:

Check out our new 93-page EV report, based on over 2,000 surveys collected from EV drivers in 49 of 50 US states, 26 European countries, and 9 Canadian provinces.

Tags: , , , , , , , , , , ,

About the Author

is a former newspaper reporter who has spent the past few years teaching English in Poland, Finland and Japan. When she wasn't teaching or writing, Chelsea was traveling Europe and Asia, sampling spicy street food along the way.

  • pc

    Would someone please define “fossil fuel subsidies” for me. As far as I know the only “subsidies” american oil company’s receive is their ability to right off exploration expenses. Seems fair to me.

  • PithHelmut

    Ample free energy is all around us. Reduce subsidies and end them within 2 years. Let’s just go for it. We’ve paid enough for wars and subsidies to corporations that poison us (fossil fuel, Big Ag, etc). Let’s give ourselves a new defined purpose with a short implementation time setting ourselves another goal to the moon, (metaphorically speaking).

  • We’re in a trap. If you made the oil companies pay for their free overseas military services they receive, gas would clear $14 per gallon and we’d collapse…


    • Otis11

      Well that’s why you implement it slowly – raise costs over a period of, say, 10 years in well documented increments. One of the largest problems RE faces isn’t technical, it’s uncertainty. Establish a single policy for the next decade and stick to it.

    • Ronald Brakels

      I’m of the opinion that the US military presence is oil producing regions is a dead weight loss. (Actually I would say it is worse than a dead weight loss, but I’m too lazy to go into why I think that, so dead weight loss will do for now.) People with oil have an incentive to sell it on the world market and that incentive remains whether or not the US maintains a millitary presence nearby. So the US could add the cost of oil related military activity to the cost of gasoline and spark a recession, or it could just stop with the oil related military activity and afford to hand out fists full of cash.

  • Otis11

    $.05 trillion? Is that $50 Billion or is it missing a digit?

Back to Top ↑