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.

Related Articles:

Solar Jobs For Veterans: New Report Highlights Growth

by Tina Casey.

Fresh off the news that President Obama is making noises about withdrawing all US troops from Afghanistan, the organizations Operation Free and The Solar Foundation have released a first-of-its-kind report that offers returning veterans the prospect of civilian employment in the US solar industry. In a nutshell, the new report demonstrates that veterans are employed in the solar industry at higher than average rates.

That’s a note of optimism for veterans of the Iraq and Afghanistan wars, who in this generation have faced a challenging employment picture.

Renewable Energy. Solar Power. Veterans solar jobs (cropped) courtesy of Vetsinsolar.org.
Renewable Energy. Solar Power. Veterans solar jobs (cropped) courtesy of Vetsinsolar.org.

The new report, Veterans in Solar: Securing America’s Energy Future, is all the more significant in light of Republican leadership policy pushing for cuts in food stamps and other safety net services on which many veterans and their families depend.

Veterans Solar Jobs On Active Duty…

It’s worth pointing out that more than a few returning veterans already have experience with solar equipment on active duty, as the Department of Defense has been pushing aggressively to transition out of dependency on fossil fuels and into more flexible, logistically sensible forms of power. That includes bases here at home as well as forward operating bases and field maneuvers overseas, too.

Just a few notable examples in the latter category are the portable solar-in-a-suitcase and solar-in-a-backpack kits, a wearable solar powered “talking vest,” and micro-grid systems with solar input.

So in a very real sense, many veterans already have solar jobs.

…And Veterans Solar Jobs At Home

Just as the wind power industry has proved to be a welcoming home for the wide range of skills possessed by returning veterans (see here and here for example), the solar industry has been going above and beyond to offer new pathways to employment.

Since we’ve been pausing here and there to note things, let’s also note that the distributed nature of the solar industry mitigates against the kinds of social, environmental and economic stresses experienced by communities that are hosting fossil fuel “boom” operations.

The more community-friendly nature of solar employment dovetails with the Department of Defense’s emerging environmental stewardship mission, most eloquently expressed by the US Army Net Zero vision (yes, that’s what the Army calls it: a vision).

Veterans in Solar: Securing America’s Energy Future

The new Operation Free/Solar Foundation report is well worth a read in full (here’s that link again), but here are a few nuggets for now:

…America’s solar industry has grown by 500 percent since 2008, providing more than 13,000 veterans with job opportunities as of November 2013.

…veterans represent nearly ten percent of all solar workers at a time when more than 15 percent of veterans aged 18-24 are currently unemployed.

…growth in the industry is continuing: nearly 62 percent of solar companies that employ veterans plan to add more solar workers within the next 12 months.

In support of the new report, Congressman Scott Peters (CA-52) had this to say:

Our servicemen and women have made great sacrifices for our country and it is our responsibility to ensure that when they return home there are high-skill and well-paying jobs available. The solar industry offers our veterans a unique opportunity to use the knowledge they learned serving our country in a rapidly growing sector that is vital to both our national security and economic future.

Okay, so try not to fall asleep waiting for a Republican member of Congress to come out and support veterans solar jobs although when it gets down to governors Republican Arizona Governor Jan Brewer has stepped up in full support of an industry that supports our troops.

Otherwise, seriously, try to think of one Republican member of Congress and if you come up with something drop us a note in the comment thread.

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This article, New Report Highlights Growth In Solar Jobs For Veterans, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy. Solar power. Tina CaseyTina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. You can also follow her on Twitter @TinaMCasey and Google+.