Today we would like to take apart the story telling that renewables benefits too many subsidies from governments. The recently released International Monetary Fund’s (IMF) report Energy subsidy reform: the way forward gives interesting insights of the budgets of 176 countries.
IMF'S REPORT
The report paints a desolating bleak picture: in 2011 the amount of public subsidies granted by governments to fossil energy sources was of $ 1.9 trillion (2,5% of world GDP). The three most "generous" countries were the US (502 billion), China (279 billion) and Russia (116 billion). On the other hand, the subsidies granted to renewables in 2011 amounted to 88 billion $ (International Energy Agency).
This is an enormous amount of public money spent unproductively, since fossil energy sources have nothing to do with future and sustainability. The IMF lists a number of problems caused by this flood of money, among which we highlight:
FAIR TAXES, FAIR COMPETITION
In the end, if coal, oil and natural gas were taxed considering also their impact on the environment, they would have much more difficulties to compete with renewables. Subsidies to fossil sources are effectively preventing a change in energy policy that would ensure a more sustainable future. It is time to claim a fair competition between the various energy sources. And we have a pretty good idea of which would win it.
Click here to download the IMF's report
Picture: 350.org