Solar power subsidies are a drop in the bucket compared to the gravy train the fossil fuel sector still rides. The International Monetary Fund has pledged to “shine a light on the murky cobweb of energy subsidies”.
In an address to the UN High-Level Forum on Sustainable Development; IMF Managing Director Christine Lagarde spoke of a triple challenge facing the planet – economic instability, environmental damage and insufficient equity.
“We cannot view these in isolation. Each feeds on and magnifies the other,” she said.
Ms. Largarde stated energy subsidies, including tax subsidies, came to almost $2 trillion in 2011; “a whopping 2½ percent of global GDP that could have been used more wisely.”
Even US President Barack Obama has recognised enough is enough. Earlier this year, he proposed billions more be invested in renewable energy and the elimination of $4 billion in fossil fuel subsidies in his 2014 budget proposal.
In recent years the International Energy Agency (IEA) has also repeatedly called for a winding back of fossil fuel subsidies, which are at times obscured from public view. “Governments need to stop hiding their handouts to oil, gas and coal and come clean,” says the IEA.
Renewable energy subsidies are the relatively new kid on the block, as is the industry itself – and it’s not unusual for fledgling sectors to require a helping hand. However, the fossil fuel sector has been around for well over a century, has been hugely profitable for much of the time; yet has had its snout firmly planted in the public trough for decades – and still does today.
While renewables such as solar power have still flourished on an uneven playing field; with fossil fuel subsidisation wound back and the support diverted to renewable energy, a cheap yet clean energy future will arrive even faster.
