While some may criticize the amount of money being spent in relation to solar power and other renewable energy subsidies including various solar rebates and feed in tariffs, it’s a drop in the bucket compared to what is being given to prop up fossil fuels – industries that have been around since even before the turn of last century.
In February, a workshop was held at the International Energy Agency (IEA) Headquarters in response to the request from G20 Leaders to the IEA, OPEC, OECD and World Bank to produce a Joint Report aimed at providing “analysis of the scope of energy subsidies and suggestions for the implementation”. The G20 aims to rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.
According to Jacqui Fatka, writing for agribusiness site FeedStuffs, a resulting draft report on energy subsidies found that the world could be spending USD$500 billion annually to subsidize fossil fuels – the majority from subsidised end-user prices.
Closer to home and according to a 2007 study , 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.
One of the arguments against renewables is their cost compared to polluting fossil fuels. However, if subsidies were removed from these well established industries and instead rerouted to clean, renewable energy technology; still a fledgling sector, it may paint a very different picture in terms of costs.
