Global fossil fuel subsidies = $548billion

A serious problem. Those like Abbott who dish out these subsidies are the first to crap on about "market forces" when in fact subsidising fossil fuels at such an enormous level massively distorts said market. Surely it's only fair for renewable energy to be on a level playing field with fossil fuels.

In the case of countries that are large exporters of energy – like Australia – the IEA says the “exhaustibility of the resource means that higher consumption now reduces sales in the future.” 

Critically, it says, “the market distortions created by fossil fuel subsidies lead to a misallocation of resources, which results in a longer term economic cost.” 

The report adds that fossil fuel subsidies crowd out more productive and meritorious government spending and depress private investment, including in the energy sector itself. 

These subsidies, the report continues, also encourage excessive fossil fuel consumption, which can aggravate pollution, boost greenhouse gas emissions, artificially promote energy-intensive industries, accelerate the depletion of natural resources and reduce incentives for investment in renewables and energy efficiency. 

In fact, the report names the handicapping of renewables as one of the most damaging effects of subsidising fossil fuel – an effect that hinders investment in clean energy technology, slows deployment and reduces learning rates, thus slowing the pace of cost reduction as the technologies mature. 

“Fossil fuel subsidies rig the game against renewables,” says the report, “and act as a drag on the transition to a more sustainable energy system. On the other hand, subsidies to renewables can, if well designed – aid the deployment of sustainable technologies in support of energy security and environmental goals.” 

In other words, it says, “the more a government subsidises fossil fuels, the more it has to subsidise renewables if it wants to keep a level playing field.” more