business energy

Why are we still subsidising fossil fuels?

If you put together tax breaks, feed-in tariffs and other forms of government support, the renewable energy industry received between $43 and $46 billion last year, according to Bloomberg. If you add up similar support for oil and gas projects, the total comes to $577 billion.

Isn’t there something rather perverse about this scenario?

As Bloomberg point out, the irony is that renewable energy suffers because investors are convinced that it will never take off without government support, but haven’t spotted the same problem in the oil industry.

To add a further twist, the $577 billion figure is only the conventional support. In the latest issue of Foreign Policy, Peter Maas makes a case for including military expenditures in suppport of oil. We might never know if the Iraq conflict was really about oil or not, in any official capacity. But even if securing the world’s fourth largest oil reserves was just a fortuitous by-product of bringing democracy to Iraq, it would still make that figure look extremely conservative.

In fact, one recent study estimated the total US military expenditure on securing oil supplies at a stunning $7.3 trillion over the last three decades. All of which would suggest that if we’re serious about getting renewable energy off the ground, we could be a whole lot more generous.


  1. Rest assured that the US$ 7.3 trillion were not spent because I – or anyone else – was generous. If this is true – and I think it might well be – the real problem is lack of democratic control over national spendings of Western (or all) countries. Switzerland might be the glorious exception. Our democracies feel relatively free merely because the leashes are startingly long. They are held by an iron grip just outside the horizon of most people.

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