Global Subsidies – November 2011

Global Energy Subsidies – 2010

Every year, the International Energy Agency publishes an assessment of global energy subsidies, updated for price and policy adjustments. I can’t tell if they count everything, but, coincidentally, the US DOE concluded a domestic analysis, which provides some additional information.

The IEA estimates over $400 billion in oil/gas/electricity subsidies, worldwide, in 2010. The major culprits, as usual, are Iran (20% of total), Saudi (11%), Venezuela and Egypt (5% each). For the first time, China was not in the top 5. The Agency forecasts that the elimination of subsidies would cut global consumption by 5%, and reduce the greenhouse gas emissions by the equivalent of German French, and English output, combined. According to the agency, the US oil/gas/power subsidy was $5 billion in 2009, and likely $7 billion (final report due November 9) in 2010.

The US DOE analysis adds interesting color — estimating $4.1 billion for oil, gas, and coal (2010), but this does not include any oil/gas/coal-related subsidies at the power generation level. It is likely that, including power, the US analysis is close to the IEA conclusion. However, the US DOE goes a step further, comparing the oil/gas/coal subsidies to renewables (largely solar, wind, biofuels), which tallied almost $15 billion in support, plus ‘conservation and end-use subsidies, which added another $15 billion. Reasonable people can disagree on the methodology (should cheap capital for highways, pipelines count?), but oil/gas subsidies pale in comparison with the public perception.

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