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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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

New IPCC Report Leaked: Humans Cause Global Warming, Global Warming Consequences speeding up

by Joe Romm, PhD — Special to JBS News

Originally published on Climate Progress.

Temperature change over past 11,300 years (in blue, via Science, 2013) plus projected warming over the next century on humanity’s current emissions path (in red, via recent literature, much of which is reviewed in the new IPCC report.)

Temperature change over past 11,300 years (in blue, via Science, 2013) plus projected warming over the next century on humanity’s current emissions path (in red, via recent literature, much of which is reviewed in the new IPCC report.)

The Fifth — and hopefully final — Assessment Report (AR5) from the UN Intergovernmental Panel On Climate Change (IPCC) is due next month. The leaks are already here:

Drafts seen by Reuters of the study by the UN panel of experts, due to be published next month, say it is at least 95 percent likely that human activities – chiefly the burning of fossil fuels – are the main cause of warming since the 1950s.

That is up from at least 90 percent in the last report in 2007, 66 percent in 2001, and just over 50 in 1995, steadily squeezing out the arguments by a small minority of scientists that natural variations in the climate might be to blame.

This is a doubly impressive story since, as we’ve reported, Reuters has slashed climate coverage and pressured reporters to include false balance. Leading climatologists who have seen drafts of the report confirm this story’s accuracy.

Of course, nothing in the report should be a surprise to readers of Climate Progress, since the AR5 is just a (partial) review of the scientific literature (see my 12/11 post, It’s “Extremely Likely That at Least 74% of Observed Warming Since 1950″ Was Manmade; It’s Highly Likely All of It Was). The draft AR5 confirms that natural forces played a very small role in warming since 1950, which again means that human activity is highly likely be a source of virtually all of the recent warming.

I say the AR5 is a “partial” review that is “hopefully” the last because, like every IPCC report, it is an instantly out-of-date snapshot that lowballs future warming because it continues to ignore large parts of the recent literature and omit what it can’t model. For instance, we have known for years that perhaps the single most important carbon-cycle feedback is the thawing of the northern permafrost. The IPCC’s Fifth Assessment climate models completely ignore it, thereby lowballing likely warming this century.

No doubt some in the media will continue to focus on the largely irrelevant finding that the equilibrium climate sensitivity (ECS) may be a tad lower than expected.

In terms of real world warming and its impact on humans, the ECS is a mostly theoretical and oversimplified construct — like the so-called spherical cow. The ECS tells you how much warming you would get IF we started slashing emissions asap and stabilized carbon dioxide concentrations in the air around 550 parts per million (they are currently at 400 ppm, rising over 2 ppm a year, and accelerating) — AND IF there were no slow feedbacks like the defrosting permafrost.

The climate however is not a spherical cow. Every climate scientist I’ve spoken to has said we will blow past 550 ppm if we continue to put off action. Indeed, we’re on track for well past 800 ppm. And a 2012 study found that the carbon feedback from the thawing permafrost alone will likely add 0.4°F – 1.5°F to total global warming by 2100.

So the alarming disruption in our previously stable, civilization-supporting climate depicted in the top figure is our future. On our current emissions path, the main question the ECS answers is whether 9°F warming happens closer to 2080, 2100, or 2120 — hardly a cause for any celebration. Quite the reverse. Warming beyond 7F is “incompatible with organized global community, is likely to be beyond ‘adaptation’, is devastating to the majority of ecosystems & has a high probability of not being stable (i.e. 4°C [7F] would be an interim temperature on the way to a much higher equilibrium level,” as climate expert Kevin Anderson explains here.

Dr. Michael Mann emailed me:

The report is simply an exclamation mark on what we already knew: Climate change is real and it continues unabated, the primary cause is fossil fuel burning, and if we don’t do something to reduce carbon emissions we can expect far more dangerous and potentially irreversible impacts on us and our environment in the decades to come.

As for the seeming slowdown in global warming, that turns out to be only true if one looks narrowly at surface air temperatures, where only a small fraction of warming ends up. Arctic sea ice melt has accelerated. Disintegration of the great ice sheets of Greenland and Antarctica has sped up. The rate of sea level rise has doubled from last century.

Finally, very recent studies of the ocean, which has absorbed the vast majority of the heat, also show global warming has accelerated in the past 15 years. Sadly, the AR5 appears to have stopped considering new scientific findings before the publication of this research.

Ocean Heat Content from 0 to 300 meters (grey), 700 m (blue), and total depth (violet) from Ocean Reanalysis System 4.

Ocean Heat Content from 0 to 300 meters (grey), 700 m (blue), and total depth (violet) from Ocean Reanalysis System 4.

Reuters notes that climate scientists are “finding it harder than expected to predict the impact in specific regions in coming decades.” This regional uncertainty is not surprising but still quite alarming. Indeed, it is a key reason adaptation to climate change is so much more difficult and expensive than simply reducing greenhouse gas emissions.

After all, if you don’t know where the next super-storm or super-heatwave is going to hit, you pretty much have to prepare everywhere. As a major 2011 study by Sandia National Laboratory concluded, “It is the uncertainty associated with climate change that validates the need to act protectively and proactively.” That study found because of “climate uncertainty as it pertains to rainfall alone, the U.S. economy is at risk of losing” a trillion dollars and 7 million American jobs over the next several decades.

On this point, climatologist Kevin Trenberth e-mailed me:

“We can confidently say that the risk of drought and heat waves has gone up and the odds of a hot spot somewhere on the planet have increased but the hotspot moves around and the location is not very predictable. This year perhaps it is East Asia: China, or earlier Siberia? It has been much wetter and cooler in the US (except for SW), whereas last year the hot spot was the US. Earlier this year it was Australia (Tasmania etc) in January (southern summer). We can name spots for all summers going back quite a few years: Australia in 2009, the Russian heat wave in 2010, Texas in 2011, etc.

Similarly with risk of high rains and floods: They are occurring but the location moves.”

The point is, we know that many kinds of off-the-charts extreme weather events will get more intense, longer lasting, and more frequent — in fact, they already are. But we don’t know exactly where and when they will hit, which means adaptation requires pretty much everybody, everywhere to plan the worst-case. Just when you think the Jersey shore is very unlikely to be hit by a superstorm, along comes Sandy.

I very much doubt the IPCC’s Fifth Assessment Report will move the needle on climate action because of its inadequacies; because the media has scaled back climate coverage and let go of its best climate reporters; and because the fossil fuel funded disinformation campaign will try to exploit those first two problems to make it seem like this report gives us less to worry about, when it simply underscores what we have known for a quarter-century. Continued inaction on climate change risks the end of modern civilization as we know it.

banner-400x150-1a Still paying a service

Air quality forecast to get worse until 2060 – then improve

Air quality forecast to get worse until 2060 – then improve | 03/06/2013
by John Brian Shannon John Brian Shannon

Every year, large amounts of man-made (anthropogenic) greenhouse gases such as carbon dioxide (CO2) and other, more deadly gases, are added to the Earth’s atmosphere

air pollution 2
Most of the world’s energy supply is fossil fuel based (86.2%). However, recent successes in renewable energy foretell a ‘cleaner’ future energy mix. Image courtesy of: http://www.drsoram.com

Since the beginning of the Industrial Revolution, mankind has been adding evermore CO2, coal soot, wood smoke, and other airborne emissions to the atmosphere. But in recent decades have we been adding more greenhouse gases to the planet’s natural systems than they can absorb.

For example, last year, human beings contributed a total of 37 Gigatons of CO2 (and CO2 equivalent) gases to the atmosphere.

Less than half of this total was absorbed by what is termed ‘The Commons’ – which is manifested in this case, as the combined ability of the world’s oceans, forests and grasslands to absorb those emissions.

In brief, ocean plankton, the world’s forests, and grasslands, take in CO2 – and produce life-giving oxygen in return. All the world’s ocean plankton, the millions of square miles of forests and grasslands combined, remove less than 18 Gigatons of CO2 from the atmosphere per year.

Next year, we will contribute 38 Gigatons of CO2 and equivalent gases to the Earth’s atmosphere, and in 2015 we will contribute even more CO2 to the atmosphere. In 2016, and 2017, humans are projected to add even more CO2 to the air blanket surrounding the Earth.

Soon enough, ‘the commons’ will only be absorbing a third of all man-made CO2 production.

Which is why we have global warming and the negative consequences associated with global warming.

THE TRAGEDY OF THE COMMONS (excerpt)
by Garrett Hardin

The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone’s long-term interest for this to happen.

This dilemma was first described in an influential article titled “The Tragedy of the Commons,” written by Garrett Hardin and first published in the journal Science in 1968.” — Princeton University

The present upward trend of CO2 production is expected to continue until 2060, when anthropogenic global CO2 levels will begin to fall dramatically according to the world’s major energy companies — which have predicted that solar, wind and other renewable energy will take the place of oil and gas.

The present renewable energy production is small when measured against the total amount of conventional energy. One bright spot, is that half of all new electrical energy production comes from renewable energy. And, due to aggressive clean air regulations in countries around the world (Denmark, Germany, the U.S., Japan, and others) soon, more of the world’s new or under construction, energy power plants will be powered by renewable energy.

Some may think that we are putting ‘too much effort’ into the change-up to renewable energy, but they must remember that CO2 lingers for up to 100 years in the atmosphere — while some toxic airborne pollutants, such as nitrogen oxides, sulfur dioxides, H2S, and CFC’s, stay in the atmosphere for up to 50,000 years.

GWP2

Much of the CO2 and other, much longer-lived toxic gases produced during the Second World War era, are still with us — we are breathing it now and will be for some time to come.

Think about all those Gigatons of as yet unabsorbed greenhouse gases which have been piling-up — some of which last for 100 years, while other greenhouse gases last up to 50,000 years.

And we keep adding to it. Tick, tick, tick…