Fossil Fuel Subsidies Dwarf Those for Renewables

June 28, 2012

Clean technica:

Ah, FOX News and GOP politicians at the federal level will harp on clean energy subsidies all day… but won’t drop fossil fuel subsidies for anything (note: many local- and state-level Republicans are actually supporting clean energy industries). But the fact remains: fossil fuel subsidies are much larger than clean energy subsidies.

International Energy Agency figures show that government subsidies for fossil fuels are 12 times greater than those for renewable energy,” the Guardian notes.

Julian Scola of the European Wind Energy Association (EWEA) writes: “It makes me wonder — how do politicians and media can get away with talking  about removing subisidies from renewables without even mentioning the existence — let alone withdrawal — of much larger subsidies for much more established energy technologies? It is hard to understand.” [sic]

It is a wonder. Julian goes on to point out the difference between fossil fuel and wind power subsidies:

… public subsidies for wind power are dwarfed by those channelled to fossil fuels and nuclear. OECD figures show that coal, oil and gas in the UK were subsidised to the tune of £3.63 billion in 2010, while onshore and offshore wind received only £700 million in the year to April 2011 — that’s more than five times less than fossil fuels.

Moreover, International Energy Agency figures show that coal, oil and gas subsidies in 37 countries received a total of $409 billion in 2010, compared to $66 billion for renewables.

Shockingly different, eh?

And, another critical point is that fossil fuel industries are largely mature industries, which shouldn’t be receiving subsidies, while clean energy industries are largely nascent industries that should be receiving subsidies!

Government support has already played an important role in expanding Europe’s use of wind power. And while the industry aims to be competitive in a fully liberalised market, wind power needs subsidies to get it on a level playing field with dominant fossil fuels which have received subsidies for decades.

The industry is working hard to become fully cost-competitive with fossil fuels. And that is setting aside the fact that much of the environmental and human health cost of extracting, transporting and burning fossil fuels to make electricity is not included in the cost of fossil fuels. Costs have already fallen over recent years — largely due to improved turbine design and the increased efficiency of blades and other components. A recent report by the Grantham Research Institute found that onshore wind power will be cost competitive with fossil fuels by 2016 in the UK. Meanwhile, the biggest and best-sited wind farms in the world are already cost competitive, and onshore wind is already considerably cheaper than nuclear power.

In some places, wind power is actually now cost competitive with or significantly cheaper than fossil fuels.

44 Responses to “Fossil Fuel Subsidies Dwarf Those for Renewables”

  1. omnologos Says:

    oh the bother…anybody wants to detail where those 409 come from, exactly? Prize: free trip to anti-government demonstrations in Iran, Russia and Saudi Arabia.

    • omnologos Says:

      three “downgrades” already. from perfect ignoramuses who have no idea what the bulk of those “subsidies” is about, and are happily leaving their brains shut down so they can be led by their noses by The Guardian.

      come on Peter show some courage and publish a list of which countries subsidize fossil fuels and how and by how much. I’d do it myself but then the aforementioned shut brains wouldn’t believe me.

      • jasonpettitt Says:

        I found the following interactive map of fuel subsidies around the world from a linky on The Guardian’s environment web page today.

        • omnologos Says:

          Thank you Jason…that’s a good graph and hopefully it’ll bring the discussion to some more serious level than and the Guardian ever will.

          Actually it’s a good idea, next time I’ll post links to “safe” websites like NGS’. For example (I scored 8 out of 12 – the figures in there should be enough to show what kind of rubbish the Guardian wrote)

          Of course they (NGS) have some funny way to compute eg the “subsidies” in the UK, but I presume I can’t ask for too much can I.

          otter17: it’s not snide remarks I’m making but expressing my frustration at seeing data tortured and befogged when the numbers should be known by all.

          • otter17 Says:

            Sure… frustration expressed through snide remarks despite the source of the original study given.

      • otter17 Says:

        The Guardian? The article clearly states that the study was done by the International Energy Agency (IEA). A quick search brings up the IEA webpage and their methodology. The IEA and the American counterpart, the EIA, have generally been bullish concerning fossil fuel role in future energy.

        The reason for the thumbs down probably comes from your seeming inability to ask a simple clarifying question without some snide remark or tone snuck in there.

      • andrewfez Says:

        I’ve found where the oil subsidies are coming from:

        It says that so far, America has spent 1.3 Trillion dollars in oil subsidies, since 2001.

    • I googled “iea 409” and the fifth response was May I have my prize please?

    • Martin Lack Says:

      What is the organisation you are the (London) Press Officer for again? Ah yes, Popolo della Liberta (i.e. “People of Freedom”). Presumably, the scientifically-illiterate libertarian Conservative James Delingpole is a friend of yours?

      I think people like you and James need to dispense with childish fantasies like the Watermelon fallacy; and embrace the reality that a laissez-faire attitude to the environment is not working.

      • omnologos Says:

        Martin – you’re completely off. Good luck with living with yourself. And thanks for confirming there is absolutely no point in having this discussion, where the vast majority of oil subsidies are given out by oil producers and in particular a large collection of what nobody would call “liberal democracies”.

        • greenman3610 Says:

          in fact, if you look at the map, you might well conclude that oil reserves are inimical to democracy. That’s certainly the case in the US.

        • Martin Lack Says:

          Another illuminating addition to the debate as to whether humanity should kick its carbon habit sooner rather than later… that certainly was not.

        • Martin Lack Says:

          Maurizio, I think you need to differentiate between ad hominem and ideological critique. I am not attacking you; I am critiquing the ideological basis of your insistence that we do nothing.

          Otter17, Is it just me or do you also suspect Maurizio’s feigned indignation to be a popular tactical avoidance measure?

      • otter17 Says:

        I think when one tweaks the rules somewhat, to give incentives to those that pursue the right actions, the environment can work together with the economics.

      • otter17 Says:

        Not exactly surprised he is associated with a libertarian group.

        Not that libertarians are inherently bad or anything, heck I love a lot of the ideas myself, but that some I have talked to have this absolutely unyielding denial that anything pro-active can or should be done to stop climate change.

        • Martin Lack Says:

          Thanks for the moral support. Is it just me or do you also suspect Maurizio’s feigned indignation to be a popular tactical avoidance measure?

          • otter17 Says:

            Well, the tactic of goal post shifting and changing the subject comes up often in the contrarian toolbox.

          • omnologos Says:

            otter17 – In truth, I am not the one shifting goal posts and changing subjects. The subject of this post is (the removal of) fossil fuel subsidies. For unfathomable reasons, Martin (and you?) have tried to move the subject to my overall political stance at national Italian level.

            I have tried several times to push the debate instead towards discussing how to remove, in fact, fossil fuel subsidies (FFS). The starting point however can’t be “how big are FFS, worldwide”, because there is no worldwide government and the FFS are paid by governments. Campaigns like’s and the Guardian’s are just pie-in-the-sky because they don’t look at the what the problem actually is.

            The starting point ought to be: which governments are paying FFS, how big those payments are, and how we can reduce those to zero? (a worthwhile endeavor, if you ask me, despite Martin’s hallucinations about me wanting to do nothing).

            By looking at maps courtesy of well-known denialist websites such as NGS (no comment), anybody and everybody should be able to understand that FFS subsidies are mostly and greatly paid by non-democratic oil producers, plus India. Actually, by looking in detail at places I know very well (the UK, Italy), I can say that the minimal FFS I could directly push to eliminate, are on the back of massive state income due to fossil fuel consumption.

            So removal of FFS in the UK and Italy is going to be difficult unless one can show it fiscally neutral. Not sure if this applies to the USA, where FFS seem big but so is the economy, hence the consumption of fossil fuels and their taxation.

            Likewise, India might have a large FFS outgoing from the state coffers, amply compensated by additional revenues and a growing economy.

            As for Russia, Iran, Venezuela, etc etc I am all ears for proposals on what to do with FFS over there.

            However, if all we can do is say, “Look there is lots of FFS worldwide”, well, that is just mindless posturing, the usual heartwarming call to stir up the troops and nothing else.

          • otter17 Says:

            Sure, getting a bit out of the scope, here. I don’t care either way about libertarianism, until it comes to the point where some folks think they can roundly dismiss the significance of scientific studies or IEA studies, etc in the name of protecting some ideal.

            Sure, each country has its own reasons for subsidies, and I don’t have the time to look into each to see if the overall worldwide figures are skewed. My perspective comes from the USA, where a similar disparity is in place.

            If you think that citing the generally pro-fossil fuel IEA is just mindless posturing, I guess that is your right to believe so. Citing the conclusions from a credible source is pretty common, though.

            But, the common ground here could be this:
            1) Government accounting office tallies up the historical subsidies, land giveaways, tax breaks, etc.
            2) Immediately stop fossil fuel incentives in place.
            3) Implement renewable energy subsidies until the amount given equals the historical amount given to fossil fuels.
            4) Stop all subsidies for energy.

          • Martin Lack Says:

            Maurizio, granted, I was moving the goalposts. However, this was only out of frustration with your track-record of dodging the issue. With the greatest of respect, your responses (to any suggestion that there is an urgent need to act) are nearly always variants of laissez-faire/wait-and-see/science-is-not-settled… No hallucination was or is required.

          • omnologos Says:

            Martin – I can’t do a thing about the “track record” of mine you’re imagining in your brain.

            otter17 – the mindless posturing is not about citing the IEA, but about citing the UEA to organize a worldwide campaign that cannot get anywhere because FFS are mostly done by a group of countries, and anti-FFS-campaigners are mostly interested into and blaming a completely different group of countries.

            It’s a bit like saying, “let’s fight for peace in the world” and then concentrate on Sweden and Lithuania because after all, they do have standing armies. Of course peace is not endangered by Sweden or Lithuania. Likewise FFS in Western democracies exist, but they’re not what “dwarves” subsidies for renewables.

            What I blame Peter about, is to have taken the worldwide data and Guardian article without having any thought about the actual issue of FFS.

          • Martin Lack Says:

            I’m not imagining anything, Maurizio. You validate my thesis on a daily basis.
            (Sorry if you consider this to be a snide remark; I consider it to be an obvious truth).

          • omnologos Says:

            of course I do. that’s what imagination is about.

          • otter17 Says:

            The article still delineates the 37 country study from individual countries. The amount of indignation for the given content seems ridiculous.

  2. Nice article Peter. Its time to drop fossil fuel subsidies permanently. Then we can end this mess. As another recent article points out, we are absurdly subsidizing selling coal to China. Perhaps we should have some part of legislation that shows the monetary effects on health and other indirect consequences. GAO should be doing this.

    Send the message out to everyone about the hypocrisy of fossil fuel subsidies.

  3. Martin Lack Says:

    Just over a week late, Peter, but welcome to the #EndFossilFuelSubsidies party anyway.

    Seriously though, the stranglehold that the Fossil Fuel Lobby has got on all our politicians is like some form of collective hypnosis. They just don’t seem to be able to see the hypocrisy of it all… Therefore:
    — despite the promises made at the Pittsburgh G20 meeting in 2009 to phase out the subsidies and/or the fuels themselves; and
    — despite the warning from scientists regarding the seriousness of the problems we are causing by continuing on a business as usual trajectory; and
    — despite the agreement of economists that admit the costs of mitigation are set to rise exponentially…
    Last week in Rio de Janeiro, our politicians decided to do absolutely nothing. They are insane; as indeed we must be to allow them to get away with it.

  4. Witness the corporatocracy. Oil companies control government with their monopolized wealth and power. Thus, despite their easily foreseen Hubbertian demise, they can do a lot of damage as they force their agenda to keep their dying industry alive. At the same time, they are sucking up subsidies while profiting from extending a failed energy endgame. Obviously, the current economic system is failing. It rewards greed, creates boom and bust cycles, and has no inherent incentives for sustainability or quality of life. It creates billionaires who have stolen every penny giving one percent to charity, and enterprising street corner, sign holding homeless living under freeway overpasses.

  5. […] on carbon emissions that focusing purely on electricity. Ultimately, a carbon tax, to counter the effective subsidies given out to fossil fuels, is also […]

  6. […] on 11 July 2012 by dana1981The International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subisides than renewable energy […]

  7. […] International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subsidies than renewable energy […]

  8. […] International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subsidies than renewable energy […]

  9. […] International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subisides than renewable energy […]

  10. […] International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subisides than renewable energy […]

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