Fuel Subsidies

Here’s a unique idea that can have a fast and enormous positive impact on sustainability – and on reversing climate change problems. If you haven’t done much overseas travel, you may not know that many nations do not provide subsidies for fossil fuels, so gas, for example, runs around $10 a gallon.  That’s why they have so many small and extremely fuel-efficient cars, and why over half of all new car sales are electric.

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Just 10% of fossil fuel subsidy cash ‘could pay for green transition’


Redirecting small portion of subsidies would

unleash clean energy revolution, says report


Damian Carrington Environment editor

The Guardian

Thu 1 Aug 2019


Switching just some of the huge subsidies supporting fossil fuels to renewables would unleash a runaway clean energy revolution, according to a new report, significantly cutting the carbon emissions that are driving the climate crisis.

Coal, oil and gas get more than $370bn (£305bn) a year in support, compared with $100bn for renewables, the International Institute for Sustainable Development (IISD) report found. Just 10-30% of the fossil fuel subsidies would pay for a global transition to clean energy, the IISD said.

Ending fossil fuel subsidies has long been seen as vital to tackling the climate emergency, with the G20 nations pledging in 2009 to phase them out, but progress has been limited. In May, the UN secretary general, António Guterres, attacked subsidies, saying:


“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 new analysis shows how redirecting some of the fossil fuel subsidies could decisively tip the balance in favour of green energy, making it the cheapest electricity available and instigating a rapid global rollout. Richard Bridle of the IISD said …


“Almost everywhere, renewables are so

close to being competitive that [a 10-30%

subsidy swap] tips the balance, and turns

them from a technology that is slowly

growing to one that is instantly the

most viable and can replace really large

amounts of generation. It goes from being

marginal to an absolute no-brainer.”


The transition from polluting fossil fuels to clean energy is already under way. Annual investment in renewables has been greater than that in fossil fuel electricity generation since 2008 and new renewable capacity has exceeded fossil fuel power each year since 2014.

But progress is slow compared with the urgency required, said Bridle.


“There is no question that renewables can

power the energy system. The question

now is can we transition quickly enough

away from fuels like coal, and subsidy

reform is a very obvious step towards that.”


Very few ways of cutting emissions actually save governments money, he said. Ipek Gençsü of the Overseas Development Institute, said …


“Taking away subsidies from fossil

fuels and channeling them towards

clean energy would boost their

development at a much faster pace,

and help secure our climate goals.”


An added bonus is the social and economic benefits, such as reduced air pollution and health spending. Rana Adib, the executive secretary of the global sustainable energy network REN21, said …


“A key breakthrough [in the energy

transition] could occur if countries

cut their fossil fuel subsidies, which

are propping up dirty energy.”


recent REN21 report found 112 nations subsidised fossil fuel prices.

Reform of fossil fuel subsidies could have a significant impact on global heating. An earlier IISD study of 20 countries with large fossil fuel subsidies found that a 30% swap to renewables would lead to emissions reductions of between 11% and 18%.

Most experts define fossil fuel subsidies as financial or tax support for those buying fuel or the companies producing it. The IMF also includes the cost of the damage fossil fuel burning causes to climate and health, leading to an estimate of $5.2tn of fossil fuel subsidies in 2017, or $10ma minute.

Ending the subsidies would cut global emissions by about a quarter, the IMF estimates, and halve the number of early deaths from fossil fuel air pollution.

Bridle said funding fossil fuel subsidies was “madness”, but said ending them could cause short-term price rises and political difficulties, as the benefits of lower costs in the future and reduced air pollution are less obvious. He said …


“There are political problems but

it is worth persevering because

the prize is so big. You have to

bring people along with you.”


Gençsü said governments must ensure that the most vulnerable people were not adversely affected by changes.

Fossil fuel subsidies are most prominent in oil-producing nations such as Saudi Arabia, which subsidises petrol, and some coal-using countries such as Indonesia, which caps the cost of the fuel at 75% of the market rate. Some nations are making progress, with India cutting petrol subsidies by about 75% since 2014, according to the IISD.

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Given that you’re not personally in a position to reduce or eliminate fossil fuel subsidies yourself, the question, then, is “What can you do?”

Speak with your political representatives at both the state and federal levels. Questions would be:


  • Would you consider lowering the subsidies to fossil fuel organizations, for the long-term benefits of renewables?


  • What support would you need or want to make this happen?


You can also send them this article.

When the Supreme Court ruled that corporations could function as individuals, our entire system changed.  And major industries, such as oil companies, pharmaceuticals, and agri-businesses, formed political action groups, (the “Super PACs”,) to which they contributed significant sums.

Political leaders – of all parties and at all levels of government – need funds for their campaigns. And politicians tend to be loyal to people that help them get elected. Therefore …

The more you move towards renewables, personally, the more power the renewable industry will have. They can then form super PACs of their own, and lead legislation that will jump the use of renewables and bring greater health to our planet, and to each of us, personally.

The change would, literally, lead to a breath of fresher air!

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