Category Archives: Fossil fuel subsidies

Fossil subsidies hit a ‘staggering’ $5.7 trillion in 2017

By IMF staff and Tim Dickinson, May 9, 2019
Repost from The Energy Mix; Full story: International Monetary Fund and Rolling Stone
skeeze / Pixabay

Global fossil fuel subsidies were expected to total US$5.7 trillion in 2017, and U.S. subsidies in 2015 exceeded the country’s profligate military spending, according to analysis released earlier this month by the International Monetary Fund.

In a summary of its May 2 working paper, the IMF places 2015 subsidies across 191 countries at $4.7 trillion, or 6.3% of GDP, including $1.4 trillion from China, $694 billion from the U.S., $551 billion from Russia, $289 billion from the European Union, and $209 billion from India.

“The numbers are quite staggering,” said IMF Managing Director Christine Lagarde, “fiscally, but also in terms of human life, if there had been the right price on carbon emission as of 2015.” The IMF’s working paper summary states that “efficient fossil fuel pricing in 2015 would have lowered global carbon emissions by 28% and fossil fuel air pollution deaths by 46%, and increased government revenue by 3.8% of GDP.”

With subsidies brought under control, Lagarde added, “there would be more public spending available to build hospitals, to build roads, to build schools, and to support education and health for the people.” The summary notes that “about three-quarters of global subsidies are due to domestic factors—energy pricing reform thus remains largely in countries’ own national interest—while coal and petroleum together account for 85% of global subsidies.”

Rolling Stone compares U.S. subsidies to the $599 billion budget the country’s bloated military received in 2015. “To offer a sense of scale, Pentagon spending accounted for 54% of the discretionary [U.S.] federal budget in 2015,” the magazine writes. “In comparison to another important, but less well-funded part of the federal budget, fossil fuel subsidies were nearly 10 times what Congress spent on education. Broken down to an individual level, fossil fuel subsidies cost every man, woman, and child in the United States $2,028 that year.”

The fossil industry and its “stooges in public office” routinely argue “that making consumers pay for the full impacts of fossil fuel use would cripple the economy,” Rolling Stone adds. “The IMF experts call bullshit on this idea, revealing that the world would, in fact, be more prosperous. Eliminating subsidies for fossil fuels would have created global ‘net economic welfare gains’ in 2015 of ‘more than $1.3 trillion, or 1.7% of global GDP,’ the study found,” with the calculation based on reduced environmental damage and higher government revenues after factoring in consumer losses due to higher energy prices.


    EARTHTALK: Where Do Vice President Candidates Pence & Kaine Stand on Environment?

    Repost from Earthtalk

    Where Do Vice President Candidates Pence & Kaine Stand on Environment?

    By John McReynolds, 08/13/2016

    Dear EarthTalkWhere do the Vice President choices for the upcoming Presidential election (Tim Kaine and Mike Pence) stand in terms of environmental track record and commitment?

    Mitchell Finan, Butte, MT

    Not surprisingly given the current political climate, the respective Vice Presidential candidates differ on most of the issues, including their policies on the environment and energy.

    kaine pence sml 400x267 Where Do Vice President Candidates Pence & Kaine Stand on Environment?
    The two Vice Presidential candidates (Democrat Tim Kaine and Republican Mike Pence) could hardly be father apart on their respective stances on conservation, environment, energy and what to do about climate change. Credit: Joel Rivlin, Gage Skidmore

    On the Democratic side, Hillary Clinton’s VP choice Tim Kaine has opposed big oil companies since his career as Virginia State Senator. He first endorsed a “25% renewables by 2025” goal back in 2007, and has continued his staunch support ever since. He has been a champion of diversifying America’s energy portfolio. “We’re not going to drill our way out of the long-term energy crisis facing this nation and the world… we can’t keep relying oil,” said Kaine back in 2008. He reinforced this position again in his 2012 Senate race by arguing against tax subsidies for major oil companies.

    As far as environmental protection, he has not shown much of a track record in support or against. In May of 2013, he did vote affirmatively on a bill to protect ocean, coastal and Great Lakes ecosystems. The League of Conservation Voters (LCV), which puts out an annual national environmental scorecard for politicians, has attributed a 91 percent lifetime score to Kaine, clearly naming him as one of our nation’s leading politicians. More recently, in late 2015, Kaine voted against a bill that attacked Environmental Protection Agency (EPA) carbon pollution limits. Of course, a Republican dominated Congress passed the bill anyway, although President Obama quickly vetoed it to maintain stricter limits on carbon pollution.

    Across the aisle, Donald Trump’s VP selection, Mike Pence, lacks any sort of environmental agenda in his political career. The LCV gives him a lifetime score of only four percent, meaning he is no friend of the environment. Pence, who served in the U.S. House of Representatives from 2001-2013 when he assumed the Indiana governorship, voted against a “Cash for Clunkers” recycling program in 2009 and also voted no on a bill improving public transportation in 2008. Meanwhile, he voted affirmatively for deauthorizing critical habitat zones and approving forest thinning projects in 2005 and 2003, respectively.

    As for energy policy, Pence supported the “25% renewable energy…” goal in 2007 like his opponent Kaine. However, since then, he has supported offshore drilling, opposed EPA regulation of greenhouse gases and voted without any environmental conscience. He also voted against incentives for alternative fuels, for the construction of new oil refineries, and against criminalizing oil cartels such as OPEC.

    “I think the science is very mixed on the subject of global warming,” Pence stated in 2009. His record of the environment since then reflects his continued skepticism toward environmental protection efforts.

    For environmentalists, Kaine is the obvious choice over Pence, which is no surprise given the Presidential candidates who selected each of them as running mates. While Hillary Clinton may have focused more attention on other political issues over her career, she has continuously supported environmental protection and the transition away from fossil fuels, while Donald Trump has fought environmental restrictions on his ability to operate his real estate empire and recently told reporters he would consider reneging on U.S. commitments to reduce greenhouse gases made at the recent Paris climate summit.


      Richest nations fail to agree on deadline to phase out fossil fuel subsidies

      Repost from the Washington Post, via Bowling Green News

      Richest nations fail to agree on deadline to phase out fossil fuel subsidies

      By Simon Denyer Washington Post, Jul 1, 2016
      BP Toledo

      BEIJING – Energy ministers from the world’s major economies have failed to reach agreement on a deadline to phase out hundreds of billions of dollars in government subsidies for fossil fuels – subsidies that campaigners say are helping to propel the globe towards potentially devastating climate change.

      Ministers from the Group of 20 major economies met in Beijing on Wednesday and Thursday, but failed to reach agreement on a deadline, despite Chinese and American efforts and a joint appeal from 200 non-governmental organizations.

      The Group of Seven richest economies last month urged all countries to eliminate “inefficient” fossil fuel subsidies by 2025. At a separate annual meeting in June, the United States and China agreed to push for a firm target date to be set at a summit of G20 leaders in Hangzhou in September.

      Non-governmental groups are urging a “full and equitable phase-out by of all fossil fuel subsidies by 2020, starting with the elimination of all subsidies for fossil fuel exploration and coal production.”

      But energy ministers from the G20 failed to reach agreement on a deadline this week.

      “The communique repeats the importance of moving towards a subsidy reduction,” U.S. Energy Secretary Ernesto Moniz told reporters in Beijing. “But within the G20 there are different views on how fast and how aggressive on can be on that.”

      The communique itself was not immediately available, although Chinese state news agency Xinhua reported that it stressed the need to boost renewable energy investment and consumption.

      Moniz said the G20 had not agreed a specific timeline to eliminate subsidies, but said the United States believed that by 2025 or 2030, “we’d like to see very substantial progress.”

      A 2015 report by the British think thank Overseas Development Institute, along with Oil Change International, calculated that the G20 major economies subsidize fossil fuel production to the tune of $444 billion a year, marrying “bad economics with potentially disastrous effects on the environment.”

      Russia spends some $23 billion in annual subsidies, and the United States $20 billion – despite President Obama’s calls to end tax breaks on the fossil fuel industry, the report said. China spends $3 billion, while the United Kingdom is one of the few G20 countries increasing fossil fuel subsidies and cutting back on investment in renewable energy. Total G20 subsidies for fossil fuels was four times the total global investment in renewable energy, it estimated.

      “It is tantamount to G20 governments allowing fossil fuel producers to undermine national climate commitments, while paying them for the privilege,” the report said.

      A promise to cut subsidies was first made at a G20 meeting in Pittsburgh in 2009, but since then very little progress has been made – until the G7 finally set a target date last month, said Li Shuo, a climate energy campaigner at Greenpeace.

      “We think that it is critical that the G20 follows this approach and the timeline should be even earlier,” he said.

      Saudi Arabia has been the major blocker of a deal at the G20, Li said, while the United States and China want to take advantage of low oil prices by making progress this year.

      “It’s not clear how long this window will last, so it’s important to take maximum advantage of it,” he said.

      Moniz said the Saudis had already lowered fuel subsidies as part of an economic restructuring package, and were promising a second phase of subsidy cuts. “They are realizing, just as the other fuel producing countries are realizing, that promoting inefficient use of this valuable resource has to end,” he said. “Now they have to look at how they are going to structure their safety net programs.”

      But he played down expectations that a firm date for eliminating subsidies could be agreed.

      “We think the middle of the next decade would be a good time, but it’s not going to be one magic date for everybody.”

      At United Nations talks last year, countries agreed to take action to curb emissions in an effort to keep temperature rises to 2 degrees Celsius (3.6 degrees Fahrenheit). But officials and experts agree much more needs to be done to reach that goal.

      In an interview, Moniz said the Paris accord was a “major first step.” But he underlined the urgency of action to curb global greenhouse gas emissions, especially given the risk of “extremely disruptive” events, such as a significant rise in sea levels caused by a rapid melting of the Arctic ice cap.

      “If anything, what’s been disturbing is that many things are happening more quickly than the various models have predicted,” he said.

      “It’s not only the target in terms of carbon emissions, it’s when you get there – and you have to get there quickly.”

      Moniz said the United States would eventually have to the legislative action in Congress to reach longer-term emissions goals, but he said that he believed public pressure for Congress to act would mount as sea-levels rise and “Mother Nature’s voice” continues to get louder.



        Paris Conference: Broad consensus on phasing out of fossil fuel subsidies

        Repost from Government Offices of Sweden

        Broad consensus on phasing out of fossil fuel subsidies

        01 December 2015

        Global fossil fuel subsidies totalled USD 548 billion in 2013. At the COP21 climate conference, which is under way in Paris, Prime Minister Stefan Löfven presented a communiqué to the Executive Secretary of the United Nations Framework Convention on Climate Change, Christiana Figueres. The communiqué outlines important messages on how the world can phase out fossil fuels. A large number of countries and organisations are backing the messages, which were produced by the Friends of Fossil Fuel Subsidy Reform group.

        Photo: Hanna Björnfors

        Sweden, alongside likeminded countries, advocates for the phasing out of subsidies to fossil energy through the Friends of Fossil Fuel Subsidy Reform group. The group’s aim is to promote such a phase-out globally. The communiqué that was presented at the climate conference calls on the international community to mitigate climate change by accelerating action to eliminate fossil fuel subsidies. The communiqué is a politically non-binding pledge on the importance of phasing out fossil fuel subsidies.

        “It is impressive that so many countries and organisations are now coming together to phase out fossil fuel subsidies. This is a key issue that the international community must resolve to enable sustainable development,” said Mr Löfven.

        Sweden has played an active role in the efforts to gather as many countries and organisations as possible behind the communiqué. Some 39 countries from around the world and 100 international organisations and companies now back the communiqué and its messages. At national level, Sweden is demonstrating its commitment and contributions through the Fossil-free Sweden initiative.

        The communiqué was presented on 30 November at the COP21 Leaders Event on the first day of the conference in Paris. Mr Löfven was a moderator at the meeting, which was also attended by heads of state from Norway, New Zealand and the Netherlands, ministers from the Marshall Islands, Morocco and Peru, and representatives of the Organisation for Economic Cooperation and Development (OECD), the International Energy Agency (IEA) and the business sector.

        Fact box: Friends of Fossil Fuel Subsidy Reform

        Alongside some thirty other countries, Sweden is a member of the Friends of Fossil Fuel Subsidy Reform (FFFSR) group. The group was formed in 2010 to encourage G20 and APEC leaders to deliver on their commitment to phase out ineffective fossil fuel subsidies from 2009 onwards.

        Fossil fuel subsidies totalled an estimated USD 548 billion in 2013, which is around five times higher than support to renewable energy. Various studies have shown that if subsidies are eliminated, global emissions would decrease significantly. Phasing out subsidies is an important and cost-effective measure and, moreover, the subsidies primarily benefit middle- and high-income earners.

        The FFFSR countries jointly courted the G20 countries between 2011 and 2014 to push for fossil fuel subsidy reform in those countries. The group has also held seminars and workshops at UN climate conferences, the World Bank Spring Meeting and in connection with OECD meetings.



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