The entire world gives $400 billion in subsidies to oil companies. An article by The Atlantic asks this question: Is that bad? The answer, to me, is obvious — yes.
The article, noting that we spend $400 billion on oil subsidies globally, indicates that taxpayers want their governments to stop subsidizing this rich, over-mature industry, yet politicians keep the money funneling toward them. It is estimated that Tesla Gigafactory 4 in Germany will cost approximately $4.4 billion. That means you could build ~91 gigafactories for the cost of one year of global oil subsidies.
They sign treaties such as the Kyoto Protocol, which called for the governments to stop subsidizing these greenhouse gas emitting sectors, or they make agreements as they did at the G20 summit to phase out fossil fuel subsidies. But they don’t do it. President Obama declared that “a century of subsidies to the oil companies is long enough.” Despite all of this, our global governments are still giving taxpayer money to the oil companies.
We are talking the talk but not walking the walk. Each government is going around saying, “stop this,” while also doing the very thing it’s asking other governments to stop.
Maybe $400 Billion in Fossil-Fuel Subsidies Isn’t So Bad for the Planet – The Atlantic https://t.co/EdywyxKFLS
— HRTIV ⚔️ (@harrytiffanyiv) December 17, 2019
The Atlantic also refers to a new study that has just been published by Nature which tells us that withdrawing these subsidies wouldn’t have that much of an impact. Meaning that it wouldn’t make a difference. It wouldn’t reduce carbon-dioxide pollution as much as needed and committed under the Paris climate agreement. “Here we show that removing fossil fuel subsidies would have an unexpectedly small impact on global energy demand and carbon dioxide emissions and would not increase renewable energy use by 2030. Subsidy removal would reduce the carbon price necessary to stabilize greenhouse gas concentration at 550 parts per million by only 2–12 per cent under low oil prices. Removing subsidies in most regions would deliver smaller emission reductions than the Paris Agreement (2015) climate pledges and in some regions global subsidy removal may actually lead to an increase in emissions, owing to either coal replacing subsidized oil and natural gas or natural-gas use shifting from subsidizing, energy-exporting regions to non-subsidizing, importing regions. Our results show that subsidy removal would result in the largest CO2 emission reductions in high-income oil- and gas-exporting regions, where the reductions would exceed the climate pledges of these regions and where subsidy removal would affect fewer people living below the poverty line than in lower-income regions.”
Another article published by Nature Energy, however, highlights that removing fossil fuel subsidies in the United States could have a large, positive impact. “We find that, at recent oil prices of US$50 per barrel, tax preferences and other subsidies push nearly half of new, yet-to-be-developed oil investments into profitability, potentially increasing US oil production by 17 billion barrels over the next few decades. This oil, equivalent to 6 billion tonnes of CO2, could make up as much as 20% of US oil production through 2050 under a carbon budget aimed at limiting warming to 2°C. Our findings show that removal of tax incentives and other fossil fuel support policies could both fulfil G20 commitments and yield climate benefits.” Jewell, the author of the first Nature study above, however, told The Atlantic that if the US or Europe stopped subsidizing their oil companies, then an oil- or gas-exporting country would just increase their production.
Is It A Bad Thing That The World Is Spending $400 Billion On Fossil Fuels?
I believe the answer to that question is a resounding yes because these are billions of dollars that could be used to empower nations and the livelihoods of those economies. I mean, what better things could you do with $400 billion? Look at what Elon Musk has accomplished with just a few million, before his net worth went up to $20 billion. Elon Musk is focused on getting us to Mars with just a few million dollars invested.
If we can create reusable rocket boosters with a few million, then what can we do with $400 billion annually? Imagine someone like Elon Musk with access to the billions we waste on subsidizing fossil fuels each year. Yes, it’s bad that we waste that money on highly profitable companies that are literally destroying the planet and its ecosystems. The unfortunate part is that cutting subsidies and production in one country just means another will fill in to meet consumer demand. The best way to cut oil production is to cut oil use, and there’s no more effective way of doing that than switching from a gasoline car to zero-emissions transport like an electric car.