Fossil Fuel Subsidies Six Times More Than Renewable Energy

The conversations about big government and government subsidies to renewable energy certainly need to contain considerations of all the fossil fuel subsides around the world.

Fossil Fuel Subsidies Six Times More Than Renewable Energy (Bloomberg):

Fossil-fuel consumers worldwide received about six times more government subsidies than were given to the renewable-energy industry, according to the chief adviser to oil-importing nations. 

State spending to cut retail prices of gasoline, coal and natural gas rose 36 percent to $409 billion as global energy costs increased, the Paris-based International Energy Agencysaid today in its World Energy Outlook. Aid for biofuels, wind power and solar energy, rose 10 percent to $66 billion.

While fossil fuels meet about 80 percent of world energy demand, its subsidies are “creating market distortions that encourage wasteful consumption,”
the agency said. “The costs of subsidies to fossil fuels generally outweigh the benefits.” 

The Group of 20 nations in 2009 pledged to phase out state aid for carbon-based fuels dug or pumped out of the earth. In the U.S., energy
subsidies are becoming an issue in next year’s presidential election after Solyndra LLC went bankrupt with $535 million of loan guarantees by the federal government. Republican contender Rick Perry, the governor of Texas, has pledged to end all federal energy subsidies.

Since wind and solar have had time to improve their costs through research, development and scale, I think they are near to being able to compete without subsides, IF subsidies are removed for dirtier fuels. They would likely be able to compete today if there were a cost for the externalities of pollution were priced in,
such as with a carbon tax. But, that seems a long way off in this current
economic (high unemployment) and political climate.