End $300 billion subsidies for fossil fuels, says energy watchdog

| 9th November 2010
Lumps of coal
Activists and local residents in West Virginia are calling for an end to coal mining by means of mountaintop removal

Iran, Saudi Arabia, Russia, India and China are the biggest subsidisers of fossil fuel

Subsidies for oil, coal and gas sectors were six times higher than those for renewable energy in 2009, the latest International Energy Agency (IEA) assessment has revealed

Ending government subsidies for fossil-fuels is the best way of cutting demand and stopping rising carbon emissions from the energy sector, says the Paris-based IEA, which urged the money to be switched to supporting the renewable sector.

Total subsidies paid to support fossil fuels amounted to more than $312 billion in 2009 in comparison to $57 billion in support for renewables. Iran, Saudi Arabia, Russia, India and China accounted for more than half of all the coal, gas and oil subsidies.

The IEA, whose assessments most governments base their energy policies on, estimate that cutting fossil fuel subsidies would reduce the world's energy-related carbon dioxide emissions by 5.8 per cent.

'Getting the prices right, by eliminating fossil-fuel subsidies, is the single most effective measure to cut energy demand in countries where they persist, while bringing other immediate economic benefits,' said IEA executive director Nobuo Tanaka, who added that the renewable sector could play a 'central role in reducing carbon-dioxide emissions, but only if strong and sustained support is made available.'

Greenpeace welcomed the call and said the fossil fuel subsidies were leading to 'unfair competition with clean and climate friendly renewable energies.'

The IEA assessment also said China, which overtook the United States in 2009 to become the world's largest energy user, would be the key factor in tackling climate change.

Although coal-fired electricity generation was expected to continue falling in OECD countries, China was expected to see new capacity installed over the next decade that would exceed the current capacity of the US, EU and Japan. However, China's high demand for low-carbon technologies like solar PV and electric cars is expected to drive down costs in the renewable sector, with plug-in hydrid and electric cars expected to amount to 39 per cent of new sales by 2035.

'It is hard to overstate the growing importance of China in global energy. How the country responds to the threats to global energy security and climate posed by rising fossil-fuel use will have far-reaching consequences for the rest of the world. China is at the forefront of efforts to increase the share of new low-carbon energy technologies, including alternative vehicles, which will help to drive down their costs through faster rates of technology learning and economies of scale, and boost their deployment worldwide,' said Tanaka.

Useful links

International Energy Agency’s World Energy Outlook 2010

How a 22-year-old student uncovered peak oil fraud
Lionel Badal was working on his undergraduate dissertation when he suddenly found himself privy to information that he knew must be made public
Face up to natural limits, or face a 1970s-style energy crisis
None of the various technofixes on offer alter the fact that humanity has to learn to stop living on the last drops of cheap energy, and to start living within its means
Food riots will mark the end of oil
The end of the oil age won't be a pretty thing, but a new report by Deutsche Bank suggests it could be even uglier than we feared...
Peak oil before 2020 a 'significant risk', say experts
A new report highlights how woefully unprepared the Government is for a looming peak in oil production
World Bank shackling developing world to high-carbon future
World Bank lending figures reveal that fossil fuel projects are still receiving the lion's share of funding

More from this author