Worldwatch Institute calls for standard definition,
methodology for energy subsidies
Ecolog, 1/24/2014 1:55:00 PM
Production and consumer subsidies for fossil fuels have rebounded to levels prior to the
2009-2010 global financial crisis, states a new report from the Worldwatch Institute,
which questions the sustainability of the practice.
The January 2014 report, Phasing out Fossil Fuel Subsidies, suggests that creating a
standard for subsidies would help analysts understand their true impact. Currently,
estimates of fossil fuel subsidies range widely from $523 billion to over $1.9 trillion.
“A common methodology and definition can aid in analyzing the distortions that
subsidies cause in the economy and allow for a better-informed dialogue to negotiate
their phase out,” states a January 22, 2014 Worldwatch news release about the subsidies
report. “The same analysis could help alleviate the political resistance toward fuel price
increases, as countries can be guided in their decision making and supported in the
reallocation of funds,” the news release adds.
According to the Worldwatch report, the International Energy Agency (IEA) estimates
that coal, electricity, oil, and natural gas consumption subsidies in 38 developing
economies were $523 billion in 2011. In the same year, some $285 billion — more than
50 per cent of all fossil fuel consumption subsidies — went to oil.
In industrial countries, support for renewables reached $88-billion in 2011, a 33 per
cent increase over 2010, the report states. Of the $88 billion support for renewables,
two-thirds went toward electricity and the remaining third to biofuels.
The Worldwatch Institute is an independent organization dedicated to researching
global environmental concerns.
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