The International Energy Agency (IEA) made headlines recently by concluding that fossil fuels received far more global subsidies than renewable energy in 2010. However, it appears that the IEA survey only included data from the countries with the largest fossil fuel subsidies, which are mainly developing countries whose economies largely depend on fossil fuel production.
National Geographic’s The Great Energy Challenge also includes fossil fuel subsidy data from developed countries (Figure 1), bringing the total global value close to $500 billion for 2010.
Figure 1: Global fossil fuel subsidies in billions of dollars per country from National Geographic.Bear in mind that exactly what is defined as a “subsidy” can be rather subjective, so these are just rough estimates.
It’s worth noting that this trend is changing. For example, in the USA in 2011, fossil fuel subsidies in the form of tax breaks were down to $2.5 billion while renewable energy and energy efficiency programs received $16 billion in subsidies. Even many developing countries like Iran (with the largest orange circle in Figure 1 at over $80 billion in 2010 fossil fuel subsidies) dramatically reducing their subsidizing of fossil fuels (in 2011 Iran’s subsidies were down to $20 to $30 billion).
Nevertheless, despite the movement in the right direction, global fossil fuel subsidies are still much higher than renewable energy subsidies, despite the fact that fossil fuels and associated technologies have been established for decades to centuries. Fossil fuels also receive another massive subsidy which is rarely taken into account in these types of calculations – carbon emissions.
I never heard a good explanation of what subsidy applies to Oil for example. What would the figures be if the subsidy measures were weighted for market share? Wind and Solar constitute a minor share of energy production, yet there were large loan guarantees for them.
It’s time for renewables to start paying royalties like oil and gas companies do. Fair is fair.