Fossil Fuel Vs. Renewable Energy Subsidies

While renewable energy's opponents might complain about various subsidies and government rebates costing too much, something many people don't realise is fossil fuels have been subsidised to the hilt over the years. 

Renewable energy is often thought to be too expensive to be a real solution to our long term electricity generation needs. Coal and various fossil fuels on the other hand appears quite cheap.

Or are they?

While renewable energy’s opponents might complain about various subsidies and government rebates costing too much, what many people don’t realise is that fossil fuels have been subsidised to the hilt over the years.

Additionally, strategies such as a solar feed in tariff scheme do not rely on government funding; in fact, feed in tariffs are stimulus without the public debt.

According to a 2007 study from the Institute for Sustainable Futures carried out for Greenpeace Australia Pacific, total energy and transport subsidies in Australia during 2005-06 amounted to between $9.3 billion and $10.1 billion.

Of that, over 96% of the identified energy and transport subsidies provide support for fossil fuel production and consumption. Less than 4% of the identified subsidies provide support for renewable energy and energy efficiency.

The coal industry received substantial support of around $1.7 billion in 2005-06 and renewable energy, by comparison a paltry $326 million. It raises the question of why such a mature industry such as coal require this degree of propping up. Usually it’s the emerging industry that needs the greater amount of public funding.

While increased amounts of cash have been thrown at renewable energy in the last couple of years; it’s still nowhere close to what coal receives – and now some of that money is being routed to the coal industry under the guise of it being for “clean” energy.

In the recent Australian federal budget, $4.5 billion was earmarked to go towards clean energy, but over half will go towards  low-emissions coal technologies, also known as “clean coal” or “new generation coal“.

With these sorts of massive injections continuing to sustain the fossil fuel industry, it does give pause for thought as to where Australia could be now with equivalent funding poured into the country’s renewable energy sector.

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