Fossil Fuel Subsidies Are Bigger Than You Can Imagine
July 2017
Of course you already know that fossil fuel companies get large subsidies and tax relief from governments all over the world. Even though they’re hugely profitable. Which seems a bit daft.
Removing fossil fuel subsidies is a concept that is popular with many people – but not with many politicians.
But, the real figure, the actual amount of these subsidies is – well, it’s pretty astonishing.
in 2015 the IMF (International Monetary Fund) released a working paper on how much we all pay to subsidize fossil fuels (oil, gas, coal). That means all of us. Every human being on the planet.
And they looked at The Big Picture. 
They didn’t just look at what we pay to help energy companies get fossil fuels out of the ground. (The technical term for that is “pre-tax subsidies”).
They also looked at “post-tax subsidies” – these are costs such as health bills for people affected by pollution, people whose homes are flooded or storm-damaged due to climate change. (Climate change is caused primarily due to our use of fossil fuels).
And the total they came up with was a staggering $5.3 trillion for global fossil fuel subsidies – in ONE year.
Now, if you’re anything like me, you simply can’t imagine a number as big as $5.3 trillion.
How about $10 million a minute – does that make it more real? $10 million every single minute. Every minute of every day and night.
Isn’t that shocking?
It’s more than the entire health spending of ALL the world’s governments.
Talk about not sustainable!
What About More Recent Fossil Fuel Subsidies Figures?
Well, the IMF haven’t released an updated report (perhaps because the 2015 report was so huge and difficult to do). So we’ve only got more recent figures for pre-tax subsidies, not the whole, full cost.
The good news is that fossil fuel subsidies have reduced slightly in the last couple of years – perhaps because of so much pressure from ordinary people around the globe. And probably also because the price of many types of oil has dropped.
But even if governments globally were to remove all financial subsidies for fossil fuels tomorrow (and that’s pretty unlikely to happen), fossil fuel companies would STILL be heavily subsidized. Why? Because they don’t pay for their mess.
Don’t Renewables Get Subsidies too?
Absolutely! Renewable energy is subsidized. But at considerably less than the rate of fossil fuels. And renewable energy is a growing, developing industry. The idea behind subsidies for renewables is to help with the R&D (research and development) costs. Fossil fuels such as oil and coal are already long-established industries.
Not only do fossil fuels get far greater subsidies than renewables, but the way the system is set up is designed to favour fossil fuels. Subsidies reduce the costs of fossil-fuel-powered electricity generation – this makes it harder for renewables to compete on price. Subsidies also create an incumbent advantage reinforcing the position of fossil fuels in the electricity
system. As if all of that wasn’t enough, subsidies make investments in fossil-fuel-based
technologies more attractive than renewable alternatives.
Yet, even though the odds are stacked against renewables, the world is adopting renewable energy. And we need to, if we are to have any hope of slowing the worst effects of climate change.
What Can We Do?
Find out below this short video from Grist:
Every one of us on planet Earth is paying for the pollution that is leading to climate change.
And the reason these costs / subsidies are so high, is because we’re not paying the real price for our energy. We need to start doing that.
We also need to stop extracting fossil fuels – to quote a Twitter movement: #KeepItInTheGround. It’s becoming increasingly difficult to extract what’s left anyway – fracking and Arctic drilling are high risk operations.
We need renewable energy instead.
Let’s Keep It In The Ground, reduce our own demands for energy and consumer goods, and support renewable energy.
Because why on Earth should all of us pay to help a polluting, already-profitable industry make even more money?
Spread the word about the shocking cost of fossil fuel subsidies – sharing buttons below and right – thank you!
Related:
- What YOU can do to help slow climate change
- How much do you know about climate change? Find out in this fun quiz
[…] (Companies routinely say they’ll have to pass on extra costs to consumers. Presumably they hope that will be enough to stop the costs being charged to them. But consumers are already paying – with pollution, health issues and of course, climate change. And anyway, why should oil companies be allowed to “pass on” their costs to the consumer? Apart from anything else, they are subsidized). […]