Today my friend Bruce Smith pointed out this:
• How to save $300 billion, The Economist Online, 12 November 2010.
Here’s an executive summary for you busy folks:
This year’s World Energy Outlook, put out by the International Energy Agency, says that governments spent $312 billion on subsidies for fossil fuels in 2009.
According to the IEA, eliminating these subsidies would reduce the world’s energy demand by 5%: the current energy consumption of Japan, Korea and New Zealand combined. It would also reduce carbon emissions by about 0.4-0.5 gigatons by 2020.
(I think they mean annual carbon emissions. They also say “this is more than a third of the difference between business-as-usual emissions and the level needed to stand something like a 50:50 chance of limiting global warming to two degrees centigrade”, but that seems overly optimistic to me, given the figures I’ve been reading.)
Of the $312 billion in subsidies, more than a fifth comes from one country: Iran. To keep fuel prices as low as ten American cents a liter for gasoline — two cents for diesel — the Iranian government spent $66 billion in 2009. That’s $895 per person, or 20% of their GDP.
Saudi Arabia’s subsidy is even higher per capita, though lower overall and under 10% of GDP. (Guess what percent of their GDP comes from oil.)
Uzbekistan’s fossil fuel subsidy is even more absurd: a whopping 32% of GDP.
What is it for the USA, and the other countries the readers of this blog live in? What can we do to reduce or end these obscene subsidies?