Fossil Fuels receive $550bn in subsidies globally - Financial Times / IEA

[PAD1OH]

The world economy spends more than $550bn in energy subsidies a year, about 75 per cent more than previously thought, according to the first exhaustive study of the financial assistance devoted to oil, natural gas and coal consumption.

The study by the International Energy Agency, the western countries’ oil watchdog, says phasing out subsidies over the medium term, as agreed last year by the G20, would trigger vast savings in energy consumption and carbon dioxide emissions.

FT.com / Global Economy - IEA counts $550bn energy support bill

[Rhubarbless]

Well if we don’t subsidize fossil fuels people will find out how much they actually cost and might choose other alternatives at an alarming rate.

[junius]

What's to say?

[PAD1OH]

amount revised down to 409 billion

While the G20 pledged in 2009 to phase out such fossil fuel subsidies in the "medium term", the hundreds of billions that governments spend each year rose in 2010. The World Bank, economist Lord Nicholas Stern and green groups have also called for their removal.
"Energy markets can be thought of as suffering from appendicitis due to fossil fuel subsidies. They need to be removed for a healthy energy economy," said Birol. "Energy is significantly underpriced in many parts of the world, leading to wasteful consumption, price volatility and fuel smuggling. It's also undermining the competitiveness of renewables."
According to IEA research, 37 governments spent $409bn on artificially lowering the price of fossil fuels in 2010. Critics say the subsidies significantly boost oil and gas consumption and disadvantage renewable energy technologies, which received only $66bn of subsidies in the same year.

Phasing out fossil fuel subsidies 'could provide half of global carbon target' | Environment | guardian.co.uk

[Tombo]

Well if we don’t subsidize fossil fuels people will find out how much they actually cost and might choose other alternatives at an alarming rate.

Already debunked ad nauseum.




Who else on this forum gets a kick out of the 80 cent "subsidy" they need to cough up for every litre of petrol they put in their car???

What about the emissions related tax they pay on their car???


What about the premium to cover feed in tarriffs that they pay via their eletrcity bill that goes into the pockets of owners of solar panels.


Or the premium they pay on their electricty bill to pay the subsidy for all those windmills that defile our horizons?




etc. etc. etc.

[riven]

The thing with that number is that it is taken out of context and misunderstood.

First we have to give it context. This debate raged a few months ago in the US. Let’s use their data.
http://polixy.visualsociety.com/file...es-600x580.jpg
We see that indeed fossil fuels get much more subsidies. But just remember that these fuels encompass coal, gas and petroleum products.

Now the context: We see that a large part of the so called subsidies are tax breaks. In Robert Rapiers blog r squared, an entire thread was devoted to this. It turns out that the majority of these breaks are applicable to every large company with operations in the US. Not only do oil majors get these but also companies like Google and Microsoft under Section 199 of federal code (which relates to manufacturing). The foreign tax credit is also a major chunk and again applies to every company with overseas operations. Considering that fossil fuels have a far bigger manufacturing base than renewables, it is not surprising that the tax breaks would be much larger.
'Tis the Season for Oil Company Misinformation | R-Squared Blog Posts | Forums

With that in mind we can see that fossil fuels and renewables are in the same ballpark for direct spending subsidies which are not tax related. To give this it’s full context consider the next link.
http://www.finfacts.ie/artman/upload...june172011.jpg
What we see is that fossil fuels make up more than a whopping 80% of the energy mix for the United States. Indeed we can see that traditional renewable are dominated by hydropower and wood burning; two technologies that are mature and do not receive many direct spending subsidies compared to wind and solar. See page 8 of the following link.
http://www.eia.gov/oiaf/servicerpt/s...df/execsum.pdf

Overall considering the much larger manufacturing base and energy contribution of fossil fuels, it is not surprising that subsidies and tax breaks to these companies are larger. Indeed it is incorrect to label many of these subsidies as any company can apply for them if their manufacturing operations are big enough.

What we do learn is that even though corn ethanol is mandated and heavily subsidized, it still provides for a tiny amount of the US energy infrastructure. With digging we can see the same for wind and solar. The important metric that we need to look for is cost/MWh produced. Without that, quoting absolute numbers are pretty meaningless.

Overall this situation is repeated for the European and Asian situations. However using the US is easier as the information is more freely available at this stage. There is no getting around it; renewable energy solutions are more expensive the fossil fuel alternatives until a clear carbon pricing signal can be calculated. When that times, a large price shock will occur when people have to fork out much more for their energy costs.

[Tombo]

The thing with that number is that it is taken out of context and misunderstood.

First we have to give it context. This debate raged a few months ago in the US. Let’s use their data.
http://polixy.visualsociety.com/file...es-600x580.jpg
We see that indeed fossil fuels get much more subsidies. But just remember that these fuels encompass coal, gas and petroleum products.

Now the context: We see that a large part of the so called subsidies are tax breaks. In Robert Rapiers blog r squared, an entire thread was devoted to this. It turns out that the majority of these breaks are applicable to every large company with operations in the US. Not only do oil majors get these but also companies like Google and Microsoft under Section 199 of federal code (which relates to manufacturing). The foreign tax credit is also a major chunk and again applies to every company with overseas operations. Considering that fossil fuels have a far bigger manufacturing base than renewables, it is not surprising that the tax breaks would be much larger.
'Tis the Season for Oil Company Misinformation | R-Squared Blog Posts | Forums

With that in mind we can see that fossil fuels and renewables are in the same ballpark for direct spending subsidies which are not tax related. To give this it’s full context consider the next link.
http://www.finfacts.ie/artman/upload...june172011.jpg
What we see is that fossil fuels make up more than a whopping 80% of the energy mix for the United States. Indeed we can see that traditional renewable are dominated by hydropower and wood burning; two technologies that are mature and do not receive many direct spending subsidies compared to wind and solar. See page 8 of the following link.
http://www.eia.gov/oiaf/servicerpt/s...df/execsum.pdf

Overall considering the much larger manufacturing base and energy contribution of fossil fuels, it is not surprising that subsidies and tax breaks to these companies are larger. Indeed it is incorrect to label many of these subsidies as any company can apply for them if their manufacturing operations are big enough.

What we do learn is that even though corn ethanol is mandated and heavily subsidized, it still provides for a tiny amount of the US energy infrastructure. With digging we can see the same for wind and solar. The important metric that we need to look for is cost/MWh produced. Without that, quoting absolute numbers are pretty meaningless.

Overall this situation is repeated for the European and Asian situations. However using the US is easier as the information is more freely available at this stage. There is no getting around it; renewable energy solutions are more expensive the fossil fuel alternatives until a clear carbon pricing signal can be calculated. When that times, a large price shock will occur when people have to fork out much more for their energy costs.

And also that they count among "subsidies" the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions.


We shouldn't have to repreat this over and over again just because some shill reposts such garbage.


To put it into perspective. That misleadingly inflated figure covering total global oil consumption (consider the amount of energy contribution to our incomes that provieds, versus the sorts of figures racked up by those "alternatives" that contribute nothing (actual need 100% fossil fuel backup).

Spanish solar (not wind) direct subsidies alone - €126 billion = $165 billion. Real money in one country alone, which makes zero ecoonmic contribution.

Yet by failing to control the program’s cost, Zapatero saddled Spain with at least 126 billion euros of obligations to renewable-energy investors

http://www.bloomberg.com/news/2010-1...s-founder.html

[owedtojoy]

And also that they count among "subsidies" the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions.


We shouldn't have to repreat this over and over again just because some shill reposts such garbage.


To put it into perspective. That misleadingly inflated figure covering total global oil consumption (consider the amount of energy contribution to our incomes that provieds, versus the sorts of figures racked up by those "alternatives" that contribute nothing (actual need 100% fossil fuel backup).

Spanish solar (not wind) direct subsidies alone - €126 billion = $165 billion. Real money in one country alone, which makes zero ecoonmic contribution.


Spain's Solar Deals on Edge of Bankruptcy as Subsidies Founder - Bloomberg

Well, now we know.

If a renewable energy company gets any sort of a concession, it is a SUBSIDY.

if a fossil fuel company gets the same deal, it's "the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions".

Ever notice the people pushing this pap also deny the facts of climate change? Qui bono? Who benefits?

[riven]

Well, now we know.

If a renewable energy company gets any sort of a concession, it is a SUBSIDY.

if a fossil fuel company gets the same deal, it's "the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions".

Ever notice the people pushing this pap also deny the facts of climate change? Qui bono? Who benefits?

And as I clearly pointed out there are two forms to those subsidies regardless of the energy source; tax breaks on tax and direct operations subsidies. What is being unfairly inferred is that fossil fuel companies should not be receiving such large tax breaks despite that fact that most of our energy resources come from them. I dont deny climate change and I work on CO2 and energy efficiency projects. I also dont deny that renewables and clean fossil fuels will lead to cost increases in our energy future. Nor do I beat around the bush and forward any particular ideal. There are pros and cons to our current energy mix and our future energy mix. I look to realistic behaviour and currently, in Germany that means more gas and more coal with allusions to increasing renewable energy in the future.

[owedtojoy]

And as I clearly pointed out there are two forms to those subsidies regardless of the energy source; tax breaks on tax and direct operations subsidies. What is being unfairly inferred is that fossil fuel companies should not be receiving such large tax breaks despite that fact that most of our energy resources come from them. I dont deny climate change and I work on CO2 and energy efficiency projects. I also dont deny that renewables and clean fossil fuels will lead to cost increases in our energy future. Nor do I beat around the bush and forward any particular ideal. There are pros and cons to our current energy mix and our future energy mix. I look to realistic behaviour and currently, in Germany that means more gas and more coal with allusions to increasing renewable energy in the future.

If you don't deny climate change then you must surely agree that the cost of pollution and the malignant effects of climate change must be included when fossil fuels are costed, if that costing is to mean anything.

In the sense that fossil fuel companies do not pay for negative externalities, they are receiving a massive subsidy over & above what they get already.