CO2 Coalition By Bruce Everett Ph.D 7/23/2020
Executive Summary
A number of studies claim that pervasive subsidies provide an unfair competitive advantage to fossil fuels over renewable energy. Many estimates have been made of the value of direct and indirect subsidies provided to fossil fuels, the most extreme being the 2015 study by the International Monetary Fund estimating fossil fuels subsidies at $5 trillion annually.
On examination, many of the direct subsidies in this study turn out to be generally available to other businesses, and most of the value of the indirect subsidies is estimated from uncertain projections of future damages from fossil-fueled global warming, which are discussed in detail in a previous CO2 Coalition White Paper,
The Social Cost of Carbon and Carbon Taxes: Pick a number, any number. The most thoughtful and transparent evaluations of subsidies are those of the Organization for Economic Cooperation and Development (OECD), a European-based coalition of 36 market economies, and its International Energy Agency (IEA). Many of the roughly 2,200 items listed by the OECD as “subsidies†are debatable. However, focusing on subsidies alone obscures the real policy issue, which is whether government policy in total reduces fossil fuel prices below their hypothetical market level and whether these distortions occur in markets where renewables are trying to compete.
To address this issue, this White Paper (a) distinguishes “subsidies†from “externalities,†(b) includes taxes in the calculation, and (c) makes proper geographic distinctions. Taking these factors into account, the paper concludes that, even taking at full value the direct subsidies cited by the OECD and IEA, fossil fuels are significantly overtaxed and not unfairly advantaged in most countries of the world.
More:
http://co2coalition.org/publications/do-government-policies-favoring-fossil-fuels-hamper-the-development-of-wind-and-solar-power/
