Energy subsidies are designed to make the sources of the energy less expensive to the consumers, at the same time they increase the profits of the companies producing and selling the energy sources to the power companies. Typically these subsidies are payments of taxpayer money to companies to produce more energy (production subsidies), or research and development investment by governments to promote one form of energy. But there are other not-insignificant forms of indirect subsidies, such as the cost of military resources in protecting oil shipping routes, and the unpaid costs of health and environmental harm caused by the burning of fossil fuels.
In the past, these subsidies generally supported fossil fuel companies (coal, oil or gas) or nuclear plants that we relied on for generating the power we need. But over the past several decades renewable forms of energy (e.g., wind and solar) have made significant advances in supplying our power needs. They have received some subsidies but not to the extent of the other energy producers.
A serious question is growing about whether the fossil fuel companies are any longer entitled to subsidies. Renewable energy often can be produced at lower costs than the fossil fuels and without the extensive health and environmental harms associated with fossil fuels. This question is blunted by the very substantial money paid by the fossil fuel companies in lobbying governments to protect their subsidies.
Some further ideas to explore on Energy Subsidies:
Some suggest that rather than paying energy companies subsidies to lower cost to the consumers, and make more profits for the companies, it would make better sense to pay only the consumers who need help (fuel poverty). What do you think?
If we eliminate subsidies for fossil fuels in the country where you live, how much money would be saved?
If we eliminate subsidies for fossil fuels in the country where you live, would there be any downside risks to the supply of your energy?
International Monetary Fund, Climate Change: Energy Subsidies. bit.ly/2zOYQmR
David Roberts, “Friendly policies keep US oil and coal afloat far more than we thought: Most energy subsidies go not to renewables but to producing more of the dirty stuff,” Vox (26 July 2018).
How does renewable energy compare to nuclear power? Conservation Folks (19 April 2018). bit.ly/3dwsLiB
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