The Impact of Fossil-Fuel Subsidies on Renewable Electricity Generation
Fossil-fuel subsidies are prevalent in many countries.
The International Energy Agency (IEA) has estimated that consumer subsidies to fossil fuels amounted to US$548 billion in 2013. In the same year, subsidies to renewable energy were estimated at US$121 billion. However, a comparison of numbers does not reveal the extent to which renewable energy is being disadvantaged in favour of continued reliance on fossil-fuel generation. The high level of fossil-fuel subsidies certainly creates disadvantages for renewable energy, but to understand the true impact it is necessary to explore the range of subsidy mechanisms rather than focus simply on the magnitude of the cost of subsidies.
In this paper the Global Subsidies Initiative presents a more complete examination of how fossil-fuel subsidies can impact the deployment of renewable energy. The paper discusses the effect of fossil-fuel subsidies on the cost competiveness of renewables, the incumbent advantage of fossil-fuel-powered generators and the distortion of investment decisions.
You might also be interested in
Trevor Hancock: Governments ignore urgent issues
A major obstacle to achieving a more ecologically sane, socially just and healthy future is that we lack a clear understanding of the scale and significance of the global ecological crisis.
Indonesia’s Energy Policy Briefing | July 2020
This policy brief presents and discusses the most recent energy policy developments in Indonesia. It also considers measures designed to mitigate the economic and social impacts of the COVID-19 pandemic crisis implemented up to May 2020
How Can India’s Energy Sector Recover Sustainably from COVID-19?
From IISD and CEEW, Part 1 of a three-part commentary series takes a deep dive into how India’s energy sector is coping with the impacts of COVID-19 and what this means for the sustainable energy transition.
Solar Power Is Just a Switch Away
Swapping subsidies from fossil fuels to clean options can make renewables the most viable alternative.