The big Green Lie – “Fossil fuels are massively subsidised”

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Climate realists rightly draw attention to the vast subsidies paid to support renewable energy – wind and solar.  These subsidies are ramping up the price of energy in Britain and Europe.  They are forcing households and pensioners into fuel poverty.  They are doing huge damage to energy-intensive businesses like steel, aluminium, petroleum refining, chemicals, glass and cement.  They are driving plant closures and job losses.

But every so often someone on the other side of the debate will say “But fossil fuels also get big subsidies” – or even “fossil fuel subsidies are greater than those for renewables”.  This is plain not true (or as we say in plain English, a lie) even though it is based on a paper from the IMF.  The proposition has been forensically debunked by the Telegraph’s Sam Bowman.

How could the IMF get it so wrong?  What they seem to have done is to take what economists call “the externalities” of fossil fuels – that is, the costs and damages they imagine are inflicted on humanity in general by fossil fuel use – and treat these as “subsidies”.  Of course they are no such thing.  It is an abuse of language – and downright misleading – to report them in this way.

They start with the assumption that anthropogenic CO2 emissions are in fact causing global warming – a proposition increasingly open to question.  Then they estimate the cost of the damage which (they believe) is or may be the consequence of global warming.  But here, we’re into wild estimates.  How long is a piece of string?  In fact most serious analyses of the cost of global warming show that the costs of mitigation exceed the anticipated damage (the Stern Report is a rare exception).

They also wholly ignore the positive externalities of CO2 and climate.  For example higher temperatures will result in fewer cold-related deaths and fewer temperature-related deaths overall.  Elevated atmospheric CO2 levels result in more rapid plant growth and bio-mass formation, and higher crop yields to feed a hungry earth.

There are two other tricks that the Greens and their fellow-travellers use to inflate their claimed “subsidies”.  Take the VAT on domestic fuel oil in the UK.  This is set at 5%, as against a general VAT rate of 20%.  So they count the difference – 15% – as a “subsidy”.  It is of course no such thing.  A subsidy is where the government (or whoever) pays money to make a product or service cheaper than it would otherwise be.  The opposite of a subsidy is a tax.  It doesn’t matter whether that tax is 20% or 5% – it’s still a tax, not a subsidy  And in the West, fossil fuels are taxed, not subsidised.

The other device is to take countries like Russia and Saudi Arabia, where the cost of petrol is indeed subsidised for local nationals as a matter of social policy.  OK.  Those are real subsidies, but they are completely irrelevant to any discussion of taxes and subsidies on fossil fuels in the West.

Renewables, on the other hand, benefit from both direct and indirect subsidies, payable by both tax-payers and energy consumers.  And those subsidies, direct and indirect, are real.  And expensive.

They include payments to landowners who install wind turbines, and to householders and others who install solar panels.  Feed-in tariffs.  Renewable obligation certificates.  “Capacity Payments” to those who provide gas-fired capacity as back-up to intermittent renewables (without which their gas-fired plants, run intermittently, would not be economically viable).  Then there’s George Osborne’s “Carbon Floor Price”.  This is not a direct subsidy – but it is a device to force up  the price of energy and thus provide more pricing headroom for renewables.  And the EU’s ETS (Emissions Trading Scheme).  By allowing renewables to be competitive at a higher price, these have precisely the same effect as a subsidy, and are paid for by electricity consumers.

So how much is the cost of all these direct and indirect subsidies in the UK?  Of course in the face of such complexity, and with the uncertainty of longer-term predictions, we can do no better than an estimate.  But according to the Renewable Energy Foundation, the cost of renewables subsidies over the period 2002 to 2030 will be around £100 billion.  That’s a direct (and unnecessary) burden on our economy.  And on our competitiveness.

As former EU Industry Commissioner Antonio Tajani famously said (and I love to quote him) “We are creating an industrial massacre in Europe”.  Indeed we are.  And it’s time to stop doing so.

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18 Responses to The big Green Lie – “Fossil fuels are massively subsidised”

  1. omanuel says:

    The modern Wizard of Oz has been hidden behind the curtain of consensus science certainty for seventy years (1945-2015).

    To restore constitutional governments, we must first restore integrity to scientific research.

    1. AGW is false: The Sun controls Earth’s climate
    2. SSM is a lie: Stars make and discard hydrogen
    3. BBC is false: The universe has no known limits
    4. SNM is a lie: Each neutron repels other neutrons

    Mainstream scientific literature evolved into scientific trash after nations and formerly independent national academies of science were united into an Orwellian Ministry of Consensus Science Truths on 24 Oct 1945.

    References:

    1. “Solar Energy,” Adv. Astron. (submitted 1 Sept 2104; published privately 17 Mar 2015)
    https://dl.dropboxusercontent.com/u/10640850/Solar_Energy.pdf

    2. “Supplement for Teachers” (published 30 Mar 2015) https://dl.dropboxusercontent.com/u/10640850/Supplement.pdf

    3. “Intro: Science for Teachers” (published 23 May 2015)
    https://dl.dropboxusercontent.com/u/10640850/Introduction.pdf

  2. Brin Jenkins says:

    What has not been fully explained is a proven link with CO2 and Global warming, many seem unable to explain the mechanisms involved, just how exactly a cause and effect are reversed? Should we jump ship in support of this theory we would only be adding to the consensus of uninformed who display only faith without understanding.

    That makes joining this consensus look more ridiculous.

  3. Good piece Roger. Correct of course….. I particularly like the use of my illustration. Don’t mention it.

    Oh, you didn’t.

  4. Jane Davies says:

    So the jury is still out about blaming livestock for global warming!

    “World-wide, there are about 1.5 billion cows and bulls. All ruminants (animals which regurgitates food and re-chews it) on the world emit about two billion metric tons of CO2-equivalents per year. In addition, clearing of tropical forests and rain forests to get more grazing land and farm land is responsible for an extra 2.8 billion metric tons of CO2 emission per year!”
    http://timeforchange.org/are-cows-cause-of-global-warming-meat-methane-CO2

    • Brin Jenkins says:

      Surely its a case of unproven allegations were made for devious reasons! This should never have been in any court.

    • Ex-expat Colin says:

      Jane…..reply from HoC on BBC Climate bias:
      “Thank you for contacting us about Christopher Monckton and coverage of the climate change scepticism on the BBC.
      I have read the article you sent with interest and also spoken to Andrew Selous MP about his letter to the BBC. I think the best course of action at the moment would be to wait for the reply from the BBC to Andrew Selous. He will send me a copy of this which I will then forward to you. At that point we can talk again and discuss if you think further action needs to be taken.
      I hope that is a satisfactory plan for the moment. Thank you again for taking the time to contact me.”

      Mark Garnier MP
      Member of Parliament for Wyre Forest
      House of Commons | Westminster | London SW1A 0AA
      Tel 020 7219 XXXX (my X’s)

      So, when the BBC comes back with a firm Foxtrot Oscar…I’ll put that here if Mr Helmer doesn’t mind?

  5. Katie says:

    Just heard that subsidies for wind will probably be kept in Scotland but not in England. Typical Tories. Look after the home crowd and forget about the rest of us deep in the mire due to the pathetic SNP government. God it makes me want to throw up!

  6. Richard111 says:

    Thank you Roger. All good reasoning and sound advice. But I think it is time we started looking at the ‘forces’ driving this farce. It has been going on for so long, several decades by many accounts, that we should, by now, have some clue as to what is driving the greenies. What and where is their power base? What is the reasoning behind their ‘faith’?
    Why is everyone afraid to state that destruction of western economy will result in billions of untimely deaths? Don’t people realise that our current western population cannot survive without current energy availability? The destruction of western economy will also adversely impact third world survival from loss of food production and medical aid.
    Why are western governments supporting this farce?
    I could go on but why bother. If people can’t see what’s coming then they deserve what’s coming.

  7. Jenny Bastin says:

    Heaven help us if we have too many ruminants in areas where there is deforestation too!! Another good piece Roger, have heard you speak several times, never disappointed.

  8. Scott Thong says:

    It has reached the point where the 20-year hiatus in temperature rise is so widely known that the proponents of AGW no longer try to ignore it – rather, they actively (and very blatantly) shove the raw data around until a warming trend reappears!

    http://wattsupwiththat.com/2015/06/04/noaancdcs-new-pause-buster-paper-a-laughable-attempt-to-create-warming-by-adjusting-past-data/

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