In the face of “unprecedented uncertainly” in the world energy markets, the International Energy Agency (IEA) has made a bold recommendation...
Eliminate all fossil fuel subsidies.
"Eradicating subsidies to fossil fuels would enhance energy security, reduce emissions of greenhouse gases and air pollution, and bring economic benefits," the IEA stated in its 2010 World Energy Outlook report.
The IEA is an energy watchdog and policy advisor to 28 member states, including the United States.
The report claims that fossil fuel subsidies encourage wasteful consumption while undermining renewable and low-emission energy sources' ability to be competitive.
By phasing out those subsidies by 2020, the report argues, global energy demand could be cut by up to 5 percent, and carbon emissions could drop 6 percent.
The report also calls for an increase in subsidies for renewables from $57 billion in 2009 to $205 billion by 2035.
By shifting such government support from fossil fuels to renewables, the share of energy from sources like hydro, wind, solar, geothermal, biomass, and marine energy could triple by 2035.
“Renewable energy can play a central role in reducing carbon-dioxide emissions and diversifying energy supplies, but only if strong and sustained support is made available,” Nobuo Tanaka, Executive Director of the IEA, noted in a press release.
Here is a quick rundown of the main findings from the World Energy Outlook 2010 report:
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Recently announced policies can make a difference, but fall well short of what is needed for a secure & sustainable energy future;
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Lack of ambition in Copenhagen (2009's Climate Conference) has increased the cost of achieving the 2°C goal and made it less likely to happen (unless commitments are fully implemented by 2020, it will be all but impossible to achieve that goal);
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The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case;
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Renewables are entering the mainstream, but long-term support is needed to boost their competitiveness;
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Getting the prices right — by phasing out fossil fuel subsidies — is the single most effective measure to cut energy demand.
Fossil fuel subsidies reached $312 billion in 2009, and are projected to reach a whopping $600 billion if no further action is taken. The IEA suggested quick action on subsidies to curb that increase.
“Getting the prices right, by eliminating fossil fuel subsidies, is the single most effective measure to cut energy demand in countries where they persist, while bringing other immediate economic benefits,” Tanaka added.
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