Fossil Fuel Subsidies Dwarf Support for Renewables
A report from Bloomberg New Energy Finance details international government energy spending on biofuels and renewable energy.
Kevin Bullis 07/29/2010
- 17 Comments
Fossil fuels are the backbone of economies worldwide, so governments spend a lot to support them. A new report from Bloomberg New Energy Finance says altogether governments spent between $43 anf $46 billion on renewable energy and biofuels last year, not including indirect support, such as subsidies to corn farmers that help ethanol production. Direct subsidies of fossil fuels came to $557 billion, the report says.
This disparity raises the question--if the report is right and fossil fuels require so much backing, can they compete with renewables without government support? After all, some renewables--such as sugarcane based biofuels and some wind farms--can already compete with fossil fuels. Without the huge government subsidies for fossil fuels, wouldn't they be eclipsed by renewables?
The answer, for now, is no. So far renewables just can't provide enough fuel and power to displace fossil fuels. The infrastructure to make and distribute them isn't adequate, and many renewables have shortcomings that can make them difficult to work with--solar panels, for example, only generate electricity when the sun is out. If the fossil fuel subsidies disappear, gasoline and electricity prices will increase. That will help renewables compete, and increase in scale, but it will take years--likely decades--for them to reach levels high enough to replace all fossil fuels.



Bob Wallace
71 Comments
Decades...
Perhaps decades for renewables to replace fossil fuels, but do we want it to be large or small decades?
How about we start right now and tip the economic scales away from fossil fuels and toward renewables? Don't we want to free ourselves from shipping boatloads of cash overseas for oil and from the problems created by burning coal?
Make renewables more profitable, fossil fuels a bit less profitable and the rate of installing wind, solar, geothermal, and storage will accelerate.
Remember, fossil fuels now provide a huge amount more of the power on our grid than do renewables. Giving fossil fuels even a 1% subsidy cut would free up enough money to boost renewables subsidies by huge percentages and cause investors to rush to renewable projects.
(Then we'll get all that money back later in lower health care costs, cheaper utility bills, a livable future for those who follow us, and being able to tell the oil countries to kiss our grits....)
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flyingmonster
29 Comments
Re: Decades...
How short our memories. When gas was over $4.00 a gallon there was a huge amount of investment in renewable energy projects, alternative fuels etc. Technology Review posted many articles. Why? Because alternative fuels were competitive at that price. The oil companies realized they needed to put the breaks on it just as they did when the Carter administration was calling for alternative energy during a period of high gas prices.So the price of oil declined rapidly and bankrupted many start ups. Perfect game for the oil companies. Make it too risky to invest in alternatives.
I wonder how much of our military expenditure in Iraq has been counted in this article? If only we had spent all that on alternatives, whether fuels, solar, wind or just upgrading the grid where would we be today?
But if we do alternatives what are we going to use to black top our roads?
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