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Fossil Fuel Subsidies ‘Bad for Business’ Say $2.8 Trillion Investor Group
by John Brian Shannon
Originally posted at kleef.asia
In advance of the G20 Hamburg Summit in July 2017 investor groups that control $2.8 trillion in assets report that fossil fuel subsidies are counterproductive to G20 economies.
This latest call to remove fossil fuel subsidies came two years after the G20 Brisbane Summit where leaders announced their intention to, “reaffirm our commitment to rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful consumption.” — G20 Brisbane Leaders’ Communiqué (November 2014, Item #18)
The 16-member mega-investor group says G20 nations should set a clear timeline “for the full and equitable phase-out by all G20 members of all fossil fuel subsidies by 2020,” and mobilize “to accelerate green investment and reduce climate risk” in a report submitted to G20 foreign ministers preparing for the upcoming G20 Summit in Hamburg, Germany.
G20 fossil fuel subsidies total $452 billion a year according to the Overseas Development Institute and Oil Change International.
A Must Read: Empty promises:
G20 subsidies to oil, gas and coal production
Meanwhile, annual subsidies for renewable energy in the G20 nations amounts to only 1/4 of the annual subsidy awarded to fossil fuels, which have received mega-billions of subsidy dollars every single year since 1918.
For the next few paragraphs, let’s look at the United States exclusively…
The average annual subsidy for Oil and Gas alone in the U.S. from 1918-2009 totals $4.86 billion.
Adding all those (oil and gas only) subsidy years together gets you the astonishing figure of $442,260,000,000. in total from 1918-2009 — that’s half a trillion dollars right there, folks.
Which doesn’t include wars to protect foreign oil exporters to the United States.
Nor does it include so-called ‘externalities’ which are the negative costs associated with the burning of oil and gas — such as the 200,000 annual premature deaths in the U.S. caused by airborne pollution, along with the other healthcare costs associated with air pollution, the environmental costs to farmers and to the aquatic life in our rivers and marine zones, and higher infrastructure (maintenance) costs.
This chart shows only the U.S. capital gains allowance! There are other coal subsidies, direct and indirect, at play in America — in addition to the externality costs of coal.
On the Externality Cost of Coal
Each stage in the life cycle of coal—extraction, transport, processing, and combustion—generates a waste stream and carries multiple hazards for health and the environment. These costs are external to the coal industry and are thus often considered “externalities.”
We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public… over half a trillion dollars annually.
Many of these so-called externalities are, moreover, cumulative.
Accounting for the damages conservatively doubles to triples the price of electricity from coal per kWh generated, making wind, solar, and other forms of non-fossil fuel power generation, along with investments in efficiency and electricity conservation methods, economically competitive. — Full Cost Accounting for the Life Cycle of Coal (Harvard Medicine)
Fossil Fuels = High Subsidy Costs, High Externality Costs and Lower Employment: When Compared to Renewable Energy
In addition to the direct and indirect subsidy costs of fossil fuels, there are the externality costs associated with carbon fuels, but almost more important, is the ‘lost opportunity cost’ of the carbon economy.
Over many decades in the U.S., conventional energy producers have tapered their labour costs to only a few persons per barrel of oil equivalent (BOE) while renewable energy hires more workers per BOE, which will result in a significant net gain for the U.S. economy.
You will find more statistics at Statista
Even with the paltry subsidy regimes presently in place for U.S. renewable energy in the year 2017 — once fossil fuel subsidy costs, the externality costs of fossil fuels, and the ‘missed opportunity’ costs (fewer jobs per BOE) are factored-in to the equation, renewable energy really begins to shine.
And best of all — by 2020 and without any subsidies (yes, really!) renewable energy will regularly beat highly subsidized conventional energy generators at their own game — by lowering electricity costs, by lowering healthcare and infrastructure costs, and by creating thousands of new, good-paying jobs.
Who was saying that renewable energy was a pipe-dream?