Energy Subsidies: The Case for a Level Playing Field

Energy Subsidies: The Case for a Level Playing Field | 02/02/15
by John Brian Shannon John Brian Shannon

By now, we’re all aware of the threat to the well-being of life on this planet posed by our massive use of fossil fuels and the various ways we might attempt to reduce the rate of CO2 increase in our atmosphere.

Divestment in fossil fuels is under discussion — as one way to lower our massive carbon emissions

The case for divestment generally flows along these lines;
By making investment in fossil fuels seem unethical, investors will gradually move away from fossil fuels into other investments, leaving behind a smaller, but hardcore cohort of fossil fuel investors.

Resulting (in theory) in a gradual decline in the total global investment in fossil fuels, thereby lowering consumption and CO2 additions to the atmosphere. So the thinking goes.

It worked well in the case of tobacco, a few decades back. Over time, fewer people wanted their names or fund associated with the tobacco industry — so that the tobacco industry is now a shadow of its former self.

Interestingly, Solaris (a hybridized tobacco plant) is being grown and processed into biofuel to power South African Airways (SAA) jets. They expect all flights to be fully powered by tobacco biofuel within a few years, cutting their CO2 emissions in half. Read more about that here.

Another way to curtail carbon emissions is to remove the massive fossil fuel subsidies

In 2014, the total global fossil fuel subsidy amounted to $548 billion dollars according to the IISD (International Institute for Sustainable Development) although it was projected to hit $600 billion before the oil price crash began in September. The global fossil fuel subsidy amount totalled $550 billion dollars in 2013. For 2012, it totalled $525 billion dollars. (These aren’t secret numbers, they’re easily viewed at the IEA and major news sites such as Reuters and Bloomberg)

Yes, removing those subsidies would do much to lower our carbon emissions as many oil and gas wells, pipelines, refineries and port facilities would suddenly become hugely uneconomic.

We don’t recognize them for the white elephants they are, because they are obscured by mountains of cash.

And there are powerful lobby groups dedicated to keeping those massive subsidies in place. Ergo, those subsidies likely aren’t going away, anytime soon.

Reducing our CO2 footprint via a carbon tax scheme

But for all of the talk… not much has happened.

The fossil fuel industry will spin this for decades, trying to get the world to come to contretemps on the *exact dollar amount* of fossil fuel damage to the environment.

Long before any agreement is reached we will be as lobsters in a pot due to global warming.

And know that there are powerful lobby groups dedicated to keeping a carbon tax from ever seeing the light of day.

The Third Option: Levelling the Subsidy Playing Field

  • Continue fossil fuel subsidies at the same level and not institute a carbon tax.
  • Quickly ramp-up renewable energy subsidies to match existing fossil fuel subsidies.

Both divestment in fossil fuels and reducing fossil fuel subsidies attempt to lower our total CO2 emissions by (1) reducing fossil fuel industry revenues while (2) a carbon tax attempts to lower our total CO2 use/emissions by increasing spending for the fossil fuel industry

I prefer (3) a revenue-neutral and spending-neutral solution (from the oil company’s perspective) to lower our CO2 use/emissions.

So far, there are no (known) powerful fossil fuel lobby groups dedicated to preventing renewable energy from receiving the same annual subsidy levels as the fossil fuel industry.

Imagine how hypocritical the fossil fuel industry would look if it attempted to block renewable energy subsidies set to the same level as fossil fuel subsidies.

Renewable energy received 1/4 of the total global subsidy amount enjoyed by fossil fuel (2014)

Global Energy Subsidies (2014, in billions USD). Image courtesy of IISD.
Global Energy Subsidies 2014. (billions USD). Image courtesy of IISD.

Were governments to decide that renewable energy could receive the same global, annual subsidy as the fossil fuel industry, a number of things would begin to happen;

  • Say goodbye to high unemployment.
  • Say goodbye to the dirtiest fossil projects.
  • Immediate lowering of CO2 emissions.
  • Less imported foreign oil.
  • Cleaner air in cities.
  • Sharp decline in healthcare costs.
  • Democratization of energy through all socio-economic groups.

Summary

Even discounting the global externality cost of fossil fuel (which some commentators have placed at up to $2 trillion per year) the global, annual $548 billion fossil fuel subsidy promotes an unfair marketplace advantage.

But instead of punishing the fossil fuel industry for supplying us with reliable energy for decades (by taking away ‘their’ subsidies) or by placing on them the burden of a huge carbon tax (one that reflects the true cost of the fossil fuel externality) I suggest that we simply match the renewable energy subsidy to the fossil subsidy… and let both compete on a level playing field in the international marketplace.

Assuming a level playing field; May the best competitor win!

By matching renewable energy subsidies to fossil fuel subsidies, ‘Energy Darwinism’ will reward the better energy solution

My opinion is that renewable energy will win hands down and that we will exceed our clean air goals over time — and stop global warming in its tracks.

Not only that, but we will create hundreds of thousands of clean energy jobs and accrue other benefits during the transition to renewable energy. We will also lower healthcare spending, agricultural damage, and lower damage to steel and concrete infrastructure from acid rain.

In the best-case future: ‘Oil & Gas companies’ will simply become known as ‘Energy companies’

Investors will simply migrate from fossil fuel energy stock, to renewable energy stock, within the same energy company or group of energy companies.

At the advent of scheduled airline transportation nearly a century ago, the smart railway companies bought existing airlines (or created their own airlines) and kept their traditional investors and gained new ones.

Likewise, smart oil and gas companies, should now buy existing renewable energy companies (or create their own renewable energy companies) and keep their traditional investors and gain new ones.

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Canal-top solar power impresses the UN’s Ban Ki Moon

Originally published at The Hindu, India’s national newspaper

UN chief Ban Ki Moon: India taking the lead in ending energy poverty

 Solar panels cover the Narmada canal at Chandrasan village, about 40 km from Ahmedabad. - The Hindu, India's national newspaper

Solar panels cover the Narmada canal at Chandrasan village, about 40 km from Ahmedabad. Image courtesy of The Hindu, India’s national newspaper

U.N. Secretary-General Ban Ki-moon on Sunday praised India’s ingenuity and cutting-edge technology while dedicating Gujarat’s second canal-top 10-MW solar power project to the nation.

The solar panels are arranged on top of the Vadodara branch of the Sardar Sarovar Project Canal, probably a first-of-its-kind project in the world to generate power.

In a brief address, Mr. Ban said he was honoured to inaugurate “this impressive project” and commended the vision of Prime Minister Narendra Modi.

I see more than the glittering panels — I see the future of India and the future of our world. This facility shows how one project can have multiple uses of conserving land and using renewables. — Ban Ki Moon

He called on India to dramatically scale-up solar power to more than 10 percent of energy mix by 2020.

For the February event on investment in renewable energy in New Delhi, he was sending his special envoy on climate change Michael Bloomberg.

He said access to energy was important to end energy poverty.

India is taking the lead in ending energy poverty and this project shows us how. — Ban Ki Moon

He praised Mr. Modi’s leadership saying this was the kind of leadership the world needed. Action and commitment can create a safer and prosperous world, he said.

S.S. Rathore, chairperson and managing director, Sardar Sarovar Narmada Nigam Ltd, said Mr. Modi’s idea led to a one-MW pilot project being commissioned on the Sanand canal in April 2012.

The new 10-MW megawatt project is on 3.6 km of the Vadodara branch canal of the Sardar Sarovar Project Canal which passes through the city. It saves land and also prevents evaporation losses. There are nearly 35,000 solar panels and the power generated is fed into the State grid and also to operate pumping stations on the canal.

The total cost of this project is $18.3 million and is financed by the State government. It was commissioned in November 2014. The Sardar Sarovar Narmada Nigam is likely to expand this project and even encourage private entrepreneurs.

‘Emerging economies must help combat climate change’ — Ban Ki Moon

U.N. Secretary-General Ban Ki-moon said here on Sunday that while respecting the principle of common but differentiated responsibilities, emerging economies such as India, China, South Africa and Brazil should take necessary action to combat climate change.

Interacting with the press after visiting a canal-top solar power project here, he said the developed countries had caused much more impact on climate than the developing nations and they had different capacities to tackle impacts.

India was taking necessary action by projects such as the canal-top power project, a creative and impressive one which all developing countries should emulate.

To questions, he said climate finance was the most important aspect to make combating climate change a success. India could play a vital role as one of the fastest growing economies.

He was catalysing funds into the Green Climate Fund, which had topped $10 billion last year. He was optimistic about arriving at a new, robust climate treaty in Paris.

The United Nations Climate Summit 2014 in video

by United Nations

Presented to world leaders at the 2014 United Nations Climate Summit in New York, this short inspirational film shows that climate change is solvable. We have the technology to harness nature sustainably for a clean, prosperous energy future, but only if we act now.

Watch the Video: “What’s Possible”

“What’s Possible” on TakePart.com

“What’s Possible” on YouTube

Narrated by Morgan Freeman

What’s Possible calls on the people of the world to insist leaders get on the path of a livable climate and future for humankind.

What’s Possible was created by director Louie Schwartzberg, writer Scott Z. Burns, Moving Art Studio, and Lyn Davis Lear and the Lear Family Foundation. It features the creative gifts of Freeman and composer Hans Zimmer.

Directed by Louie Schwartzberg Written by Scott Z. Burns Produced by Lyn Davis Lear Narrated by Morgan Freeman Music by Hans Zimmer Editor Craig Thomas Quinlan Additional Editor Alan Wain Post Production Supervisor Courtney Earlywine Assistant Editor Annie Wilkes Line Producer Elease Lui Post Production by Moving Art Visual Effects by 422 South Sound Design by Kent Gibson, Kirk Gaughan Assistant to Director Erin Richardson With footage generously donated by: BlackLight Films, Disneynature, Earth Trust Vision, Extreme Ice Survey, James Balog, Filmthropic, Moving Art, Oceanic Preservation Society, Perkins+Will, Planet Ocean, Courtesy of Hope Production,Momentum for Change, Courtesy of United Nations Other footage provided by: AP Archives, ClipCanvas, Corbis Motion, EarthUncut TV, Footage Search, Getty Images, Pond5, T3 Media Very Special Thanks to: Alan Horn, Dan Thomas, Duane Elgin, Jonathan Klein, RALLY, Scott James, Skoll Foundation, Larry Kopald, Lear Family Foundation, Mark Johnson, Michael Pitiot, Richard Wilson, Yann Arthus-Bertrand


Watch the Sequel: “A World of Solutions”

“A World of Solutions” on TakePart.com

“A World of Solutions” on YouTube

Narrated by Morgan Freeman

Climate News

TakePart has been closely covering climate change ever since our parent company produced An Inconvenient Truth back in 2006.

Learn more about climate change and take action at takepart.com/climate.

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Doubling Renewable Energy will Save Money & Avoid Climate Catastrophe, says IRENA

IRENA | 5 Jun 2014

A 36% renewable energy in the global energy mix is possible, affordable and helps mitigate climate change

The world faces an important energy choice, according to a new report launched by the International Renewable Energy Agency in New York today. “REmap 2030” says that scaling-up renewable energy to 36% of the world’s total final energy consumption by 2030 is possible, affordable and will keep the world on a trajectory consistent with a CO2 level of 450 ppm, the widely accepted threshold to limit global temperature increase to two degrees Celsius above pre-industrial levels by 2100.

The report demonstrates that the investment cost for this global expansion of renewable energy is offset by savings of up to $740 billion per year on costs associated with pollution from fossil fuels.

Image courtesy of IRENA
Image courtesy of IRENA

The central policy question is this: What energy sources do we want to invest in?

Our data shows that renewable energy can help avert catastrophic climate change and save the world money, if all costs are considered,” said Adnan Z. Amin, Director-General of IRENA, in New York.

In answering this question, ‘REmap 2030’ makes a clear case for renewables. It shows the transition is affordable based on existing technologies, and that the benefits go well beyond the positive climate impact.

Countries today face a clear choice for a sustainable energy future.

Doubling renewable energy to 36% of global energy consumption will reduce the global demand for oil and gas by approximately 15% and for coal by 26%, cutting energy-related pollution and adverse health effects as well as increasing energy security for countries dependent on energy imports. It would also create a net gain of nearly one million jobs by 2030.

Image courtesy of IRENA
Image courtesy of IRENA

We can double the renewable energy share in the global energy mix, but we are not on that path now.

To realize the world’s renewable energy potential, all governments need to step up their efforts. We need to act now. — Dolf Gielen, Director of IRENA’s Innovation and Technology Centre, added.

IRENA recommends focusing on five key areas:

planning realistic but ambitious transition pathways; creating enabling business environments; managing knowledge of technology options and their deployment; ensuring smooth integration of renewables into the existing infrastructure; and unleashing innovation.

“REmap 2030” builds on the analysis of the energy requirements in 26 countries that account for 75% of global total final energy consumption. IRENA collaborated with countries and research institutions in the development of the report, which derives its objective from the United Nations Secretary General’s Sustainable Energy for All (SE4ALL) initiative. The report was launched today at the SE4ALL Forum at the United Nations Headquarters.

To download the full report, factsheets and other materials visit  www.irena.org/REmap

Climate Change, The Biggest Story of Our Time [2 Videos]

by John Brian Shannon John Brian Shannon

Climate Change

James Cameron says it is “the biggest story of our time” in a fresh nine-part documentary series airing on SHOWTIME that looks at our Earth, its climate and the effects of changing climate on people and local economies. Actors, economists, and political leaders set out as reporters traveling the globe in search of the effects of climate change.

Their “findings” and statements will astonish you. You may wish to keep a pen and paper handy, as there are some amazing quotes embedded in the hour-long documentary. Feel free to Tweet such quotes, or post on Facebook, and include the URL of this page.

For example, did you know that Indonesia’s forest clear-cutting causes 4% of worldwide annual carbon emissions? That’s approximately equal to all of Canada’s CO2 emissions and South Africa’s CO2 emissions, combined.

Some pretty big names are involved in this.

First, the executive producers. There are a lot of them:

James Cameron, Canadian film director, deep-sea explorer, screenwriter, editor, multi-Oscar winner, and one of the most popular film producers in Hollywood, who directed the two biggest box office films of all time: Titanic and Avatar.

Jerry Weintraub, film producer, entertainment mogul, former chairman and CEO of United Artists, and cofounder of 60s vocal group The Doodletown Pipers (once beloved to this writer).

Arnold Schwarzenegger, Teutonic movie hunk, former husband of a Kennedy, California’s 38th governor, founder of the nonprofit R20: Regions of Climate Action, and recent star of Escape Plan and Sabotage.

Daniel Abbasi, leader on climate change issues, founder of GameChange Capital, author, appointee at the EPA (worked with White House in mid-1990s on first U.S. National Action Plan on Climate Change), former strategist for subsidiaries of Washington Post and Time Warner, and former Associate Dean at Yale University’s School of Forestry and Environmental Studies.

Joel Bach, story producer at 60 Minutes for seven years, multi-Emmy awardwinner, colleague of Ed Bradley, Scott Pelley, Steve Kroft, and Lesley Stahl, veteran of ABC and NBC, and freelance producer/director of music videos, commercials, short films, and PSAs in California.

David Gelber, Ed Bradley’s producer at 60 Minutes for 25 years, winner of every major journalism award, including a Peabody, two DuPont Awards, and eight Emmy Awards, former executive producer of Peter Jennings Reporting at ABC News, winner of Best Investigative Story of 2010 Emmy with Scott Pelley on medical charlatans who peddle bogus stem cell therapy to patients dying of ALS.

Solly Granatstein, television producer formerly with 60 Minutes, NBC News, and ABC News, multiple award-winner, recent producer of “Inside Mexico’s Drug War,” “Blowout: The Deepwater Horizon Disaster,” and “Lost Children of Haiti.”

Maria Wilhelm, Executive Director of the Avatar Alliance Foundation, President & COO of CAMERON Companies, social advocate with a focus on climate change, with commercial initiatives in new technology integration and interests in China and elsewhere.

Second (although they often vie for first place), the stars of the show. Here are a few of these luminaries, all of whom showed up at the premiere:

Harrison Ford, Oscar-winning actor, environmentalist (Conservation International Board member from 1991, later Vice Chairman and Executive Committee; also involved with the E.O. Wilson Biodiversity Foundation and others), Han Solo in the first “Star Wars” trilogy, Indiana Jones in four mega-hits starting with “Raiders of the Lost Ark,” recently in “42″ and “Ender’s Game.”

Ian Somerhalder, actor (Boone Carlyle in “Lost,” Damon Salvatore in “The Vampire Diaries”), model from age 10-13, environmentalist (Ian Somerhalder Foundation, personal involvement in the cleanup after the Deepwater Horizon oil drilling disaster), conservationist, supporter of the It Gets Better Project (GLBT teen suicide), and Millenial heart-throb.

Don Cheadle, actor (Boogie Nights, Ocean’s 11, 12, 13, Hotel Rwanda, Marty Kaan on “House of Lies”), producer, Golden Globe Award winner, co-founder ofNot on Our Watch Project, U.N. Environment Program Goodwill Ambassador.

Also featured:

Mark Bittman, Christopher Hayes, Lesley Stahl, Sanjayan Muttulingam, Thomas Friedman, Olivia Munn, America Ferrera, Matt Damon, Michael C. Hall, and Jessica Alba.

by Sandy Dechert of Cleantechnica.com

See the first instalment of the nine-part documentary, below.

Subscribe to the Years of Living Dangerously channel for more.

Check out the official site for the nine-part video production here.

Click here for a summary of all episodes of the program.

Subscribe to SHOWTIME on cable TV. Order now for $25 off.

Watch on SHOWTIME free with your paid subscription.

Yale climate project. Climate Change is happening. 350.org
Yale climate project. Climate Change is happening. 350.org