fossil fuels

Germany is without doubt one of the green role models that the world is looking at, especially with respect to its energiewende. But how green is Germany really?

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Dan Farber suggests that there may be an upcoming war of attrition between fossil producing companies and those trying to curb climate change. In fact, I argue below that we are already in a war of attrition,  not with the industry but with fossil fuel exporting countries.

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Fossil fuel subsidies via

Current fossil fuel subsidies amount to $500 billion per year;

“By keeping prices artificially low, fossil-fuel subsidies encourage wasteful consumption, disadvantage renewable energy, and depress investment in energy efficiency,”

The IEA estimates that subsidies to fossil-fuel are around six times the level of support to renewable energy. Currently, 15% of global CO2 emissions receive an incentive of $110 per tonne in the form of fossil-fuel subsidies while only 8% are subject to a carbon price.

Partial phase-out of fossil-fuel generates 12% of the total emissions reduction to stay below 2°C target;

The whole problem is that the countries that subsidize fossil fuels the most are actually fossil fuel exporting countries! I had a longer discussion of this problem HERE.

So, unless it is possible to pressure fossil-fuel exporting countries to stop subsidizing their exports (fossil- fuels), we will never see a reduction in these subsidies. Even worse, we will see likely increases in these subsidies in the future, as I have noted before. It is very unlikely that fossil-fuel importing countries can pressure the exporting countries to stop subsidizing their products.

Thus, I suggest we should completely scrap the idea that it is possible to reduce those subsidies! They are going to increase in the future, and they are going to increase until we are able to sort out our fossil-fuel demand situation. Which basically requires that fossil-fuel importing countries focus more strongly on the alternatives (wind, solar, electric vehicles).

The G20 group of major economies spend $452 billion per year supporting fossil fuel industriesAccording to the IEA, “fossil-fuel consumption subsidies worldwide amounted to $548 billion in 2013, …with subsidies to oil products representing over half of the total.” Why do we still see such extensive subsidies? And what to do about it?

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