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CO2 Emissions

Published on March 18th, 2016 | by James Ayre


Report: Cut Fossil Fuel Subsidies To Cut Carbon Emissions

March 18th, 2016 by  

A new method of gauging the impact of fossil fuel subsidies on country-scale carbon emissions was recently examined in a report from The School of Public Policy at the University of Calgary. The report’s author Radek Stefanski utilized the method to create 30-year-long database incorporating figures from 170 different countries.

As the report shows, fossil fuels subsidies have been quite enormous over the last 30 years — pushing carbon emissions higher than they would be otherwise.

Radek summed this up rather clearly: “The resultant 170-country, 30-year database finds that the financial and the environmental costs of such subsidies are enormous- and steadily increasing. The overwhelming majority of the world’s fossil fuel subsidies stem from China, the US, and the ex-USSR; as of 2010, this figure was $712 billion or nearly 80% of the total world value of subsidies. For its part, Canada has been subsidizing rather than taxing fossil fuels since 1998. By 2010, Canadian subsidies sat at $13 billion, or 1.4% of GDP. In that same year, the total direct and indirect financial costs of all such subsidies amounted to $1.82 trillion, or 3.8% of global GDP.”

Also worth making note of here — the report found that if fossil fuel subsidies hadn’t been present in 2010, then carbon emissions that year would have been 46% lower than the actually were. This projection can of course be extrapolated beyond 2010, further back in time, as well as into the future.

The overall takeaway from the report is clearly that if governments are serious about cutting their countries’ carbon emissions, then the slashing of fossil fuel subsidies would be prudent.

The full report can be found here.

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Dave McCormick

    In addition to their effect on carbon emissions, these subsidies use up tax revenue that could be applied to other public goods, or perhaps to lowering taxes. What’s funny is how so few people understand this.

    • Bob_Wallace

      Dave, do you realize that American taxpayers spend between $140 billion and $242 billion each year treating the health problems caused by using coal for electricity? And many billions more to treat health problems caused by gasoline and diesel use.

      Spending a few billions now to get coal and petroleum replaced with wind and solar will save us those hundreds of billions of taxpayer dollars for year after year after year after year….

      You want lower taxes? Then invest small money to save big money. Be wise.

      • Dave McCormick

        I figured the number was big, but those figures just add more support to the argument that we can’t afford to NOT do something about climate change and get off our fossil fuel addiction. And yet, as I say, there are so many who cling to the deluded belief that there is nothing that we can or should do just because it would “cost too much” and “kill the economy”, to use the phrasing of our former prime minister.

        • Bob_Wallace

          I thought you were arguing against subsidies for wind and solar.

          • Dave McCormick

            Nope. Against subsidies for fossil fuels. And they’ve gotten much larger in recent years. China and the USA are the biggest culprits. Governments will spend billions on fossil fuel subsidies but their supporters will claim that doing anything about climate change would be waaay too expensive.

  • eveee

    How can I up vote an article. 🙂 yes. It’s about time we quit subsidizing FF while paying to clean up their mess. Let them clean up their own mess.

  • JamesWimberley

    The typical American voter, and many elsewhere, refuse to equate tax breaks (good) with cash subsidies (bad). Economists don’t agree. In fact a cash handout is much more transparent. The confusion extends to people who really should know better, like the WSJ and Forbes journalists who persist in labeling German FITs as all subsidies. They are just guaranteed prices. Whether and how far they are subsidies depends on the comparison with a notional fair market price, on which nobody has a magic crystal ball.

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