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Fossil Fuel Subsidies Dwarf Global Clean Energy Assistance: New Analysis

World leaders have just come back from the G20 where they took some mixed steps to phase-out fossil fuel subsidies (as I discussed here).  They also reaffirmed that climate change and clean energy are important issues.  But a new analysis from Bloomberg New Energy Finance shows that they have their work cut out for them as fossil-fuel subsidies dwarf those for clean energy—by a sizeable margin.

The G20’s statement affirms continued commitment to the phase-out of fossil-fuel subsidies when it stated that:

“We also encourage continued and full implementation of country-specific strategies [to phase-out fossil fuel subsidies] and will continue to review progress towards this commitment at upcoming summits.”

And on clean energy they agreed to (not much): “We reiterate our commitment to a green recovery and to sustainable global growth.”.  The G8 had a bit more to say on clean energy:

“…we are committed to building low carbon and climate resilient economies, characterized by green growth and improved resource efficiency.  We recognize the opportunities provided by a transition to low carbon and renewable energies, in particular for job creation.”

But countries have their work cut out on shifting from fossil-fuel subsidies to supporting clean energy.  Bloomberg New Energy Finance has developed this very helpful figure which shows that global subsidies for fossil fuels dwarf those provided for clean energy.*

 

Even when looking at clean energy subsidies in 2009 (a high-point as I’ve discussed here), clean energy subsidies barely even show up on the graph.

Time to shift the balance from fossil fuel to clean energy assistance.  Can 2010/2011 be the moment where the share shifts from fossil fuel to clean energy subsidies?  I sure hope so because with graphs like that it is a challenge to think that clean energy can drive the future energy deployment – how could it compete with such a lopsided trend.

So let’s get serious about turning clean energy from a dwarf to a giant.

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Charles Barton's picture
Charles Barton on July 1, 2010

The term “clean energy” is ambiguous, as is the term “clean energy subsidy.”   First, there is no agreement on whether the term “clean energy” includes nuclear power.  It is often understood that clean energy equals carbon free energy, but many environmentalist arbitrarily exclude nuclear power from the carbon free category, while tacitly including carbon emitting natural gas.  In the essay you link to, you refer to non-fossil fuel energy and it can be inferred that this would include nuclear power.  Given these ambiguities the term “clean energy,” a further definition should be offered to avoid becoming meaningless. 

The term subsidies is also problematic.  Some critics of nuclear power, point to what are basically insurance schemes as subsidies.  The common understanding of the word “subsidy” does not usually include insurance.  Thus a more precise definition of subsidy should also be offered.  

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