Economist needs lesson in energy economics

Over on the Economist, there is an account of the $312 billion global subsidy (mostly in Russia, Saudi Arabia and Iran) given to fossil fuels, as compared to the $57 billion subsidy to renewables. They choose to compare the subsidy on the amount of power provided by each form.

Some reports suggest that cutting these fossil subsidies  would produce a 6% decrease in global annual CO2 emissions.


My 2p of comment:


In dismissing the comparison between subsidies to renewables and fossil fuels, you ignore the obvious point that new technologies need pump-priming. I should not have to remind the Economist that all new ventures need capitalisation to cover start-up costs.

You also ignore the historic subsidies over the years that have accrued to fossil fuels.

Renewables are a form of energy income, whereas with fossils, as    E F Schumacher pointed out many years ago, burning fossil fuel is equivalent to using capital as a form of revenue. He proposed a tax on all capital fuels to subsidise the transition to renewables. Again, it is remarkable that an non-economist should be having to point this out to economists.

Also, with renewables, the fuel itself comes free of cost.

Not only do renewables fight climate change, they also mitigate Peak Oil and Peak Gas, and increase our energy security and independence.


They are also diverse and decentralised, leaving us less open to blackmail by groups who can shut down large sections of our energy supply.

To anticipate commentators who will raise the intermittency problem, this will be met with HVDC supergrids and emergent storage solutions.

The case for renewables is overwhelmingly strong. The fact that this is not universally recognised, and that fossils are still receiving subsidies, can only be ascribed to the lobbying power of the fossil lobby.