The U.S. Spends 10 Times more on Fossil Fuel Subsidies than Education

There is something profoundly wrong with countries that spend more on fossil fuels than they do on education. Fossil fuels are the leading cause of climate change while education is essential to the health and well being of both individuals and the societies they inhabit.

According to a recent International Monetary Fund (IMF) report, the U.S. spends ten times more on various forms of fossil fuel subsidies than it does on education. The U.S. fossil fuel industry receives 649 billion in subsidies, that is ten times more tax dollars than the public education system.
To make matters worse, the Trump administration has sought to increase support for fossil fuels while decreasing support for education.

The Power of Procurement to Reduce Both Emissions and Costs

Leveraging action across supply chains is a critical part of efforts to address the climate crisis.  We are seeing tremendous growth in companies investing in sustainability and these corporations are helping to drive the transition to a low-carbon economy. Reports demonstrate that this is both an indispensable strategy to manage risk and an important part of cost cutting efforts. The financial and environmental benefits include energy and resource efficiency.

According to a 2019 CDP/Carbon Trust global supply chain report, over the last decade some of the world's biggest purchasers have leveraged their buying power and demanded transparency from their suppliers. In the process they have cut carbon emissions by 633 million metric tons and saved an average of almost $20 billion annually.

Solar and Wind Investment Overview

For the fifth year in a row global investments in clean energy exceeded $300 billion in 2018. According to BNEF, last year saw an 8 percent reduction in clean energy investment compared to 2017, the first time we have seen a year over year decline in a long time.

Although last year set a record for new photovoltaic capacity surpassing 100GW for the first time, the sector also fell 24 percent to $130.8 billion in 2018 due at least in part to declining capital costs. The Chinese decision to restrict access to the feed in tariff contributed to a 53 percent reduction in Chinese solar ($40.4 billion).

The Benefits of Climate Action Far Outweigh the Costs

Despite problems with existing economic models and resistance from political and business leaderships the logic of climate action is irrefutable. The merits of climate action is born out by a slew of studies and rudimentary math. 

When we factor the costs of environmental damage it is difficult to come up with an assessment that does not convincingly demonstrate the value of climate action over business as usual. Here are three separate assessments that come to the same fundamental conclusion.

In a 2018 Vox article David Roberts concludes, "these days, it has gotten almost impossible to make sustainability look like a bad deal." He points to the fact that as the cost of business as usual keep rising, the costs of sustainable alternatives keep declining.

The Trump Administration is Hurting US Renewables and Imperiling the Planet

Renewable energy now accounts for around 17 percent of US electricity generation and where it not for the Trump administration that number would be higher. Trump has slowed the growth of clean power and hurt the renewable energy industry. At least 20,000 solar jobs have been lost in the first two years of the Trump presidency. After being ravaged by tariffs earlier in Trump's tenure, the US solar energy industry now has to contend with another round of tariffs on imported solar components. This is at odds fact based policy. Scientists tell us that to keep temperatures from rising above the upper threshold limit we will need to transition away from fossil fuels to renewable sources of energy.  Instead of supporting clean power the Trump administration is propping up dirty energy.

Webinar - Renewable Energy Understanding and Evaluating Your Options

This complimentary renewable energy webinar will take place on Wednesday, May 22, 2019 at 11:00 AM Pacific / 2:00 PM Eastern. It will explore four salient themes: Options, cost, risk and reliability. It will also answer the question what is the best renewable options for your organization? As well as what is the best way to add them to your energy mix?

"ENGIE Insight" has assembled a panel of experts to answer these and other questions about renewable energy.  The hosts and expert panelists include Brian Dooley, Senior Director of Renewable Consulting and Shy Muralidharan, Director of Product Management. These energy and sustainability experts will show you why now is the time to invest in renewables. Learn how renewables can be part of a holistic energy management strategy, why renewables are now so much more attainable, and future trends to watch. Get your specific questioned answered by submitting them during registration. Dooley and Muralidharan will discuss them during the Q&A session.

Training - Certified Sustainability (CSR) Practitioner Program, Advanced Edition

This event will take place on June, 06 - 07 2019 in New York City. The 2019 Sustainability Practitioner Certification Program: Sustainability Strategy and Circular Economy will give you the insights you need to meet the serious challenges we face. This two-day training offered by CSE aims to give you all the latest practical tools and resources required to implement or upscale corporate sustainability in order to drive your initiatives to the next level by generating value and creating effective strategies. Executives from Fortune 500 companies, local governments and academia have trusted CSE and participated in our advanced training to become Certified Sustainability (CSR) Practitioners and earn a unique recognition in the Sustainability and CSR field. Click here to see the training agenda.

Clean Energy is Essential for More than Just Climate Action

Clean energy is a necessary part of efforts to address the climate crisis and if implemented at scale, renewables would favorably impact far more than just the environment.

Greenhouse gas (GHG) from fossil fuel based energy sources are contributing to planetary warming and driving the climate crisis. We have just surpassed 415 ppm of atmospheric carbon for the first time in human history. We urgently need solutions and making the transition to clean energy would afford substantial GHG reductions.

A 2018 report by the International Renewable Energy Agency (IRENA) said the rapid deployment of renewables, combined with greater energy efficiency, could achieve 90% of energy sector emission reductions required by the Paris Climate agreement. This would mean that by 2050 clean energy would have to provide 66% of the world’s energy consumption and 80% of its power generation. We have a long way to go to get to these kind of numbers, but we know what we have to do and we know that it is viable.

MENA's Renewable Energy Leadership

In much of the world year over year growth of renewables has slowed, but countries in the Middle East and North Africa (MENA) are outpacing the norm. According to recent International Energy Agency (IEA) data, 2018 was the first year since 2001 that renewable energy growth failed to increase year on year. New net capacity from renewable sources was about 180 Gigawatts (GW), which is equivalent to the previous year. However, the report indicates that renewable capacity accelerated in many countries in the MENA region last year.

The World's Poor are Hurt Not Helped by Fossil Fuel Subsidies

Governments argue that fossil fuel subsidies are designed to help the poorest members of society, however, this is not borne out by the research.  The true beneficiaries of these subsidies are wealthier people and wealthier nations not the poor.

According to an IEA report, more than 85 percent of these subsidies go to middle and higher end income earners while only 8 percent of the aid is reaching the poorest 20 percent. These subsidies encourage energy consumption as people with the lowest incomes tend to be lower energy users and rarely drive.

"Fossil-fuel subsidies as presently constituted tend to be regressive, disproportionately benefiting higher income groups that can afford higher levels of fuel consumption," the report said. "Social welfare programs are a more effective and less distortionary way of helping the poor than energy subsidies."

Fossil Fuel Industry Pays Legislators to Protect their Subsidies

Image credit: The Price of Oil

The fossil fuel industry spends tens of millions of dollars each year to defend subsidies. This is part of their longstanding practice of buying influence so that they can shape political outcomes.

The Price of Oil quotes research that estimates the fossil fuel industry gets a 5,800 percent return on these investments in the form of fossil fuel subsidies. Estimates of the value of U.S. federal subsidies (excluding climate and health impacts) to the domestic oil and gas industry range from $4 billion a year, to $41 billion annually. One recent comprehensive study of U.S. energy subsidies identified $72.5 billion in federal subsidies for fossil fuels between 2002-2008, or just over $10 billion annually. Taxpayers provide $7bn a year for fossil fuel subsidies on public lands.

What Would Happen if Fossil Fuel Subsidies Were Redirected Towards Renewable Energy?

Subsidies are at the heart of energy issues. Clean power receives a tiny fraction of this money while the fossil fuel industry continues to reap the lion's share.  Fossil fuel subsidies are four to ten times larger than those given to renewable energy.

Governments around the world gave about $490 billion in subsidies to the fossil fuel industry in 2014 and only $112 billion in subsidies for renewable power generation.  Governments are planning on continuing their preferential allocation of resources to fossil fuels. According to the IEA, over the next 25 years, only 15 percent of the G20's investment in energy will be devoted to renewables.

Ending Fossil Fuel Subsidies is a Crucial First Step

Ending fossil fuel subsidies is the first step towards addressing climate change. We know that the climate crisis is a genuine emergency and we also know that fossil fuels are the leading cause, hence transitioning away from them is central to addressing the crisis we face.

"The first step towards that is to stop supporting the industry with our public dollars," Stephen Kretzmann, the executive director of Oil Change International is quoted as saying in a Center for Biological Diversity press release. "These subsidies are a raw deal for American taxpayers, and a disaster for our climate."

The Energy Paradox: Environmental Defence on Canada's Escalating Oil Subsidies

Both Canada and the province of Alberta want to have it both ways. They want to be climate leaders and major oil and gas exporters.  The Canadian federal government and the provincial government in Alberta provide massive subsidies to the oil and gas industries in the form of tax breaks, fiscal support and direct grants.  Canada is the largest provider of government support for oil and gas production per unit of GDP in the G7.

After decreasing federal payments to Big Oil by $150 million in 2017 Justin Trudeau's Liberal government appears to have changed direction in 2018. Last May the Canadian government announced it was going to buy Kinder Morgan's Trans Mountain pipeline for $4.5 billion. Last December the Liberals announced that they were giving oil and gas companies $1.65 billion in new grants, loans and financial supports. This is in addition to Export Development Canada, the country’s export credit agency, that provides, on average, $10 billion in government-backed support for oil and gas companies every year.