Fostering the Transition To Clean Energy
According to a report recently published by the nonprofit think tank International Institute for Sustainable Development (IISD):
• On a worldwide basis, coal, oil and gas get more than $370 billion per year in support.
• This compares with roughly $100 billion for renewables.
• Swapping out 10-30% of the fossil fuel subsidies would pay for a global transition to clean energy.
We’re talking about the difference between climate-caused disaster and a runaway clean energy revolution. Sounds vaguely appealing.
In 2009 the G20 nations pledged to phase out fossil fuel subsidies, but very little has happened in this space thus far. Some speculate that perhaps the profits generated by exacting and selling fossil fuels has been at least partially responsible for the quagmire here.
In any case, here’s what UN secretary general, António Guterres, said in May: “What we are doing is using taxpayers’ money – which means our money – to boost hurricanes, to spread droughts, to melt glaciers, to bleach corals. In one word: to destroy the world.”
The man’s got a way with words.
Craig,
Do you actually read these “reports” in their entirety? Or more importantly, do you read the information with critical objectivity?
The “subsidies” you talk about are usually not subsidies in the true sense but tax credits and incentives attached to things like exploration and capital expenses. Such deductions are not uncommon to any business and simply reflect the expensive and high risk nature of the fossil fuel industry.
The incentives are also granted due to the extraordinarily high contribution to tax, royalties and increased revenues paid by the oil and gas industries once established.
In contrast, renewable energy seldom makes a profit and seldom contributes to exports or higher tax revenue.
Essentially, any government with fossil fuel resources and hoping to have an advanced consumer economy, must provide adequate incentives for a strong resource tax base.
Traditionally, the oil industry has been the single largest “cash cow” for most government revenues, and the main support for the retirement and superannuation industries.
It doesn’t make economic sense to punish a highly profitable, tax paying industry in favour of encouraging industries which produce almost no revenue and need continual taxpayer bail outs.
Take away all the rhetoric and emotive alarmism, and these are the simple economic facts.