https://earther.gizmodo.com/cutting-fossil-fuel-subsidies-could-be-even-more-benefi-1841500311
[links in online article]
Cutting Fossil Fuel Subsidies Could Be Even More Beneficial Than We Realized
Dharna Noor
Feb 7, 2020
The world wastes trillions of dollars every year on fossil fuel direct
and indirect subsidies. Trillions! The U.S. alone spends hundreds of
billions of dollars on them, ten times as much as it spends on education.
That’s reason enough to shift priorities. But then there’s the climate,
which would benefit if we burned less fossil fuels (or even better,
none). Now, new research published in Nature shows that eliminating
those huge sums would have significant consequences for the climate. The
study contests previous research which found that subsidies don’t
actually have that much impact on the world’s climate crisis.
“Fossil fuel producer subsidies delay a low-carbon transition in ways
both material and political,” the authors of the new findings write.
The study challenges previous research published in 2018, which shows
that removing fossil fuel subsidies would reduce global carbon emissions
by 0.5 to 2 gigatons of carbon dioxide. That’s enough to knock them down
a few percentage points by 2030, which may sound small. But the new
findings put that in an important context, showing that it’s the
equivalent of “roughly one quarter of the energy-related emission
reductions pledged by all countries under the Paris Agreement.” Not bad.
“Any single policy approach that reduces global emissions by a few
percent is very substantial,” Peter Erickson, a senior scientist at the
Stockholm Environment Institute and author of the new study, told
Earther in an email. “It is just the nature of the climate crisis that
we need many individual solutions, so it is not particularly novel or
helpful to call such a policy ‘small,’ as the authors we criticize did.
Such a policy is only ‘small’ relative to the massive scale of the problem.”
What’s more, the emissions reductions resulting from slashing subsidies
could be even greater than that because it could significantly change
the oil industry. More of the world’s energy comes from oil than any
other fuel, and the industry is still expanding quickly, in part because
subsidies make exploration and expansion much cheaper. Without
subsidies, corporations may not actually grow their drilling operations
nearly as much because it would be too risky to invest that much of
their own money or take out loans.
And that doesn’t even get into the potential social and political
effects of removing fossil fuel subsidies, which could be huge.
Subsidies aren’t only used for more drilling but also for advertising
and lobbying (including some that may not be so, uh, truthful). If the
fossil fuel industry couldn’t promote its interest through those
channels, they might have a lot less ability to expand with impunity.
The findings also point out that the symbolic effects of cutting
subsidies could also be significant. Subsidizing a highly polluting
industry gives it a veneer of normalcy and even puts fossil fuels in a
positive light. After all, what else are subsidies for but uplift
industries and practices that benefit society? The reality is anything
but given the fact that burning fossil fuels is the root cause of the
climate crisis. Removing subsidies could remove the oil and gas
industries’ social license, which could change social perceptions and
undercut companies. That could result in a further dip in emissions,
though it’s not clear exactly how much.
“It’s no simple task quantifying the sociopolitical impacts — the
stigmatizing effects — of something like ending fossil fuel subsidies,
but we know the answer is substantially greater than zero, which is what
most models assume right now,” Geoffery Supran, a research associate at
Harvard University and study coauthor, told Earther in an email.
A recent study supports that idea. It shows that at certain points,
society can shift rapidly following relatively small changes such as
removing fossil fuel subsidies and teaching people about the “moral
implications of using fossil fuels. Crossing those societal tipping
points can trigger “self-reinforcing positive-feedback mechanisms, that
inevitably and often irreversibly lead to a qualitatively different
state of the social system.”
Removing subsidies, Supran said, could send a public message similar to
the ones sent by the fossil fuel divestment movement and youth climate
strikes, which have made meaningful impacts. Dozens of politicians have
committed to stop taking contributions from polluting companies, for
instance, and many companies are at least nominally taking climate action.
“We’re already seeing these campaigns mobilize millions of people and
billions of dollars of capital around the world,” Supran said. “Chip
away enough, and you may create a social tipping point where the pillars
suddenly crumble like a house of cards.”
Freeing up trillions of dollars worldwide could have other tangible
effects, too. Imagine what all that money could fund. Countries could
start subsidizing renewable energy and public transit and other social
programs that would lower carbon emissions and improve life. Even if
cutting subsidies doesn’t solve the climate crisis alone, that doesn’t
mean it’s not a good idea.
Earther has reached out to the authors of the 2018 letter for comment
and will update this story with their response.
Update, 2/10/20, 9:45 a.m.: Jessica Jewell, a political economy
researcher who led the 2018 Nature research, told Earther that fossil
fuel subsidies more often go to those who use them than those who
produce them, which means they make energy more affordable. That means
it may not be best to simply apply them across the board, but doesn’t
mean we shouldn’t do anything about them.
“We’ve long understood the negative effects of subsidies as well as the
fact that they are ‘locked-in’ by vested interests,” said Jewell. “Now
the task for research is to find opportunities for how and where this
lock-in can be destabilised so that subsidies can be reformed.”
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