Yes, Fossil Fuel Subsidies Are Real, Destructive And Protected By Lobbying

Another article about how much we subsidize fossil fuels to destroy our ecosystems, this one in a magazine catering to ultra-rich, Forbes:

In November, I wrote that fossil fuel subsidies worth $700 billion are stalling the energy transition. Many readers emailed me asking for specific examples of these subsidies. Others pointed out that $700 billion is a low estimate because it doesn’t account for the related health and environmental costs that are borne by the general public. 

Because you asked, let’s examine in more detail how your tax dollars give oil, gas and coal an unfair edge over clean energy. In addition, let’s consider why these subsidies persist despite their astronomical cost to taxpayers and victims of climate change.

What Counts as a Subsidy?

To recap, my team and I found that the 1,801 largest publicly traded oil, gas and coal companies worldwide earned net profits worth $500 billion USD in 2013 yet received direct subsidies worth $700 billion. This is a moderate estimate. 

On the low end of the scale is the latest estimate from the International Energy Agency (IEA) that annual worldwide fossil fuel subsides had somewhat declined but were still northward of $400 billion in 2018. The highest estimates come from a recent paper from the International Monetary Fund (IMF) asserting that subsidies reached $4.7 trillion in 2015 and $5.2 trillion in 2017—truly staggering numbers. These calculations depend on your definition of a subsidy. Clearly the latter includes related health impacts and environmental costs.

Michael Liebreich, the award winning energy consultant and founder of Bloomberg New Energy Finance, argues that the “externality costs” of fossil fuels should include medical care for air pollution and the defense of hydrocarbon supply chains, not to mention $69 trillion in climate-related damages expected to accrue between now and 2100. If neither consumers nor fossil fuel companies pay for these externalities, they are being subsidized indirectly.   

Read more here.