Why Goverments Still Fund Fossil Fuels

[@OurEden]

We hope that you enjoyed this video! Please consider supporting us: www.patreon.com/OurEden Transcript: At a time of climate pledges and promises, globally our governments still spend three times more public money on subsidising fossil fuels than renewable energy [1]. Why is this? Although the raw price of renewables has fallen below the price of fossil fuels [2], fossil fuel subsidies remain one of the world's greatest hurdles in ensuring a transition towards net zero. Fossil fuel subsidies come in two forms. Production subsidies reduce the cost of producing fossil fuels, and tend to be most common in developed countries, where the money is spent developing infrastructure, such as gas pipelines. Consumption subsidies, on the other hand, reduce the price of fossil fuels for the end user, such as the price of petrol and diesel, or gas for cooking. This is much more common in lower income countries, where the subsidies are required for citizens to afford essentials [1]. Governments extend these subsidies to either allow consumers to continue buying fossil fuels, or to ensure fossil fuel companies don’t become bankrupt during challenging periods, such as the pandemic. Governments do this because a stable supply and consumption of energy is needed to promote economic growth in their nation, and thus ensure a high GDP. Most governments around the world have relatively short electoral cycles and are thus more likely to focus on short term goals such as increasing GDP and decreasing current unemployment, which can help them get re-elected, rather than tackling systemic problems like energy infrastructure that a future government, or god forbid, a rival party, could take credit for down the line. Each year somewhere between 5 and 6 trillion [1, 3-6] dollars are spent on fossil fuel subsidies, globally. This astonishing amount of money is being used to fund the most damaging companies in the world. If you were to rank fossil fuel subsidies as a country by GDP, it would be the 3rd richest country in the world [7]. Whilst the removal of subsidies would reduce carbon emissions, some sources say this will not solve the problem. This Nature journal letter by Jewell et al. discusses that, sadly, the removal of fossil fuel subsidies alone would only make a small dent in global carbon emission of around 5% compared to most countries' 2050 net zero targets. [8]. Although, whilst this raw analysis suggests the direct effects of subsidy removal would be low, other researchers argue that indirect effects may be more important. A reply to this article argues that when taken at face value, the research by ‘Jewell et al. can be misleading. The actual impacts, particularly when one considers their social and political effects, are far greater.’. They argue that ‘Subsidies to fossil fuel companies pose formidable financial, institutional and political obstacles to this transition, impeding the efficacy of greenhouse gas emission reduction strategies.’ and therefore removal of these subsidies will allow for the political freedoms to actually implement an effective carbon reduction policy [9]. One thing this research ignores is the indirect effect of how the excess public spending could be used. Some of this public spending can be pushed into renewable energy subsidies. This recent journal article shows, using Europe as a test case, that renewable energy subsidies are effective, with ‘a 1% increase in subsidies leading to an increase in renewable generation of 0.4-1%’. Therefore, if governments increase public spending into renewable subsidies as well as decreasing fossil fuel subsidies, we will see a large increase in renewable energy generation and have a hope of hitting net zero goals in the future. [10] However, many predictions show that renewable subsidies are not set to increase to the height of current fossil fuel subsidies, which may free up future public money for healthcare and education [11]. This begs the question then, why are renewable subsidies still so low? A big part of the answer is that renewables are already cheaper than fossil fuels in a lot of cases, and thus don’t need the same infrastructure kickstart or end user discount [2, 11]. The other, less pretty, half of the coin is fossil fuel lobbying. As we have seen recently at COP26, where there were more fossil fuel lobbyists than representatives of any one nation [12], fossil fuel lobbying is at the heart of modern day climate policy, and unfortunately, oil and gas companies have been very successful in protecting their own financial interests. The American Petroleum Institute for example, funded by fossil fuel giants such as Exxon, Shell and BP, have been fighting against Biden’s Infrastructure Bill. In an effort to slow down the transition to EVs, they claimed that ‘a rushed transition to electric vehicles is part of government action to limit Americans’ transportation choice’. Rex Tillerson, the Exxon chief who went on to become Donald Trump’s secretary of state once sat on the API board, so it’s easy to see how intertwined the fossil fuel industry is with politics [13]. But, it’s not all doom and gloom. Between 2015 and 2020, 53 countries reformed their fossil fuel subsidies to some extent. Either by reducing subsidies, increasing taxes on fossil fuels or a combination of the two. [14] On top of this, earlier in the year Joe Biden announced the target of removing $35 Billion worth of fossil fuel subsidies over the coming decade. [15]. We’ve recently seen the promises given at COP26 in Glasgow, where nearly 200 countries agreed to speed up the end of fossil fuel subsidies and reduce the use of coal. But as Professor Harro van Asselt, a specialist in climate law and policy at the University of Eastern Finland puts it “It’s the discrepancy between the rhetoric and the reality that is starting to bite a little bit. We’re figuring out that it’s incredibly challenging to actually make it happen.”. Unfortunately, this discrepancy between rhetoric and reality isn’t likely to change without public pressure. Fossil fuel subsidies are damaging our climate and preventing the growth of renewable energy infrastructure, and it’s down to us as individuals to keep our governments accountable for these promises by making sure we vote for political parties who prioritise reducing fossil fuel subsidies, as one of many steps to reaching net zero where you live. Make sure you protest when you feel it's needed, write to your political candidates and local representatives, and spread awareness on topics such as this. One of the best ways we can make a real difference to large scale problems such as these is to educate ourselves and those around us, so we can use that knowledge to take action in the right places. Please consider subscribing and click the bell icon if you’d like to stay up to date with our videos. And finally, thank you to all our Patreons who help make this content possible.If you want to support this type of content please consider joining. Here you get early and add free access to our videos, bloopers and outtakes and even contribute to polls on which topics we discuss and which charities see a share of our income. And as always, look after yourselves, each other and most importantly, the planet around you. Thanks again, OurEden.

[@AnkurShah]

Solid video on subsidies - a highly underrated topic. We absolutely need the financial industry to fund climate mitigation and adaptation solutions.

[@OurEden]

Ah thanks Ankur! Your videos on similar topics are always an inspiration 😀

[@gold_real_money]

Other option? Don't say Solar and Wind. Those are piece of innefficient craps. You must be joking! Insted we should try cheap, abundance and effective energy, Nuclear Energy or Clean Geothermal Energy powered by Earth's Heat.

[@terenceiutzi4003]

They don't fund it at all! It costs well over 40 years profit from a refinery to build it so the government let's them write them off over 30 years instead of ten! But they give money on top of writing off profit to renewables because renew able will never turn a profit! Sounds fare to me! How much of your income are you willing to give to the renewable investors ?

[@tedbohne2313]

why? there is no construct known to man to replace biomass fuel nor will there be withe next century at least......common sense should scream that out.....there are many other HUGE issues to bring up on this topic. but, if this doesn't make a dent, the rest would be way above your paygrade..............sorry........

[@benediktkaufer8194]

Great video - thank for putting the info together :)

[@OurEden]

Glad you enjoyed it, Benedikt!

[@kezzo2009]

Amazing video as ever ☺️

[@OurEden]

Thank you, Kiran! 😄

[@Sam-sc6rr]

Cause promoting anti-renewables propaganda is expensive.

[@Kangaroo-Bob]

But without subsidies how will fossil fuel CEOs be able to feed their kids?

[@richardjohnson5529]

although we need to transform to clean energy, a much better way to fight climate warming is to eat vegan plant based food as animal Hfarming is a much bigger cause of climate warming and environment destruction, and that leaves out the animal cruelty that comes with animal Hfarming.

[@OurEden]

And you've correctly guessed one of the videos we're currently writing! You're right in that food and agriculture is a massive chunk of global GHG emissions, and we look forward to covering that in the next video, a transition towards plant based diets has to go hand in hand with a clean energy transition if we want to mitigate the effects of climate change as effectively as possible!

[@cameronf3343]

Also need to start being more effective with our food supply by eating ugly yet edible foods like what Misfits Market and Imperfect Foods are trying to help.

[@lyndonbarsten393]

Fossil fuels are an ancient EXPENSIVE source of energy.

[@karlmiller7188]

The Government NEEDS to put a complete end to subsidise now!

[@karlmiller7188]

Not to end fossil fuel dependency but to stop rewarding fossil fuels.

[@SuccessMindset2180]

Too much renewables are too expensive if equipment required not produced inside countries themselves

[@mickelodiansurname9578]

Forget about the environment what about the tax money taken from hospitals, education and every other thing that needs that money, mostly becasue it should not be tied to 'profit' anyway. In a free market economy the government should not be interfering in any form of energy production, sales or distribution at all... and personally I don't care if its to stabilize prices of energy. The free market will sort that out very fast if there were no subsidies on any form of private businesses at all. You really want subsidies... great... apply to your government to nationalize your business! You don't want to do that fine... sling your hook!

[@SpencerSnyder]

Wow, such a fantastic video. Concise, well presented, and beautiful animations. Looking forward to more of your stuff!

[@OurEden]

Thank you very much, Spencer! Glad you enjoyed it, new videos will be out soon! 😁

[@mmandrewa2397]

And then you can always lie.

[@OurEden]

How do you mean?

[@koskos758]

Crappy video - talk too fast and rush the pictures - are you in a hurry - annoying?!

[@OurEden]

Thanks for the feedback, we'll work on pacing the next video better :)

[@jamesdaniel1376]

First, governments don't have to subsidize fossil fuels as they are capable of paying for themselves. The reality is that, at least on gasoline, the government makes more in taxes off every gallon of gas than the gas companies make in profits. Then you have the expenses of oil companies having to pay the government for the ability to drill on public lands or offshore through leases and permits. "Green" or renewable energy sources on the other hand, are very expensive and can't compete in an open market without some sort of subsidies. In addition, they lack the reliability of fossil fuels. Solar cells only produce energy when the sun is out and only produce full power in full, direct sun. Windmills only make electricity when the wind is blowing. This lack of reliability and high cost leads us to the conclusion that the push for renewables as a major energy supplier is about politics, not common sense. We should be asking who is really benefitting from the subsidies and what connections they have to government?

[@cameronf3343]

The issue with the logic in the “they only work in ideal conditions” is that it’s not truly compensating of 1; just how little of a problem those supposed inefficiencies are due to large national grids, 2; how much meteorological strategy goes into creating these systems for utilities, and 3; the fact fossil fuels without subsidies don’t actually work by our current global financial state for the consumer. I don’t think you’re aware the scale of fossil fuel power stations. They are massive facilities which regularly span hundreds of thousands of square feet and cost tens to hundreds of millions of dollars, with the largest nearly a billion, just to construct - and then tens of millions of dollars per year throughout lifetime to keep fueled and operating. In an old source I read in 2016 it was estimated that without fossil fuel subsidies gasoline would likely cost over $10/gallon for 87 octane and energy prices would be anywhere between 5-7x their current amount depending on your region. So to elaborate on those 3 misconception points. 1; due to the fact grids are nationalized infrastructure, it’s fatally shortsighted to say “only when the wind is blowing or the sun is ideal” in a negative context. Simply because there is a massive likelihood your energy to your house right now already came from at least 1,000 miles away. Your utility is in charge of making sure the energy from the grid gets delivered to your house, however, it is tens of thousands of power generation companies and sources which actually produce the energy. This is just a switch. I’m currently in PA; the turbines outside my town are in fact *always* running except when a single one is down for maintenance, and they have been since they were finished in 2005. I pay attention to them. Just because it may not be windy at a farm in Tennessee at that very moment doesn’t mean our’s aren’t running, and vice versa. As well, if we get into marine wind power, they in fact *are* always running, and remarkably powerfully too. 2; utility scale projects are not on par with homeowner solar. Wind turbines are built in direct correlation with decades-trending wind patterns and in strategic places. Hilltops/mountaintops. Over the ocean. In windy flatlands with no obstructions. Solar and hydro are equally strategic and optimized for placement with conditions backed by long recorded data. We know a lot more about how the wind moves than many think it’s actually almost intimidating just how much more reliable meteorology is when it’s advised by physicists than TV weathermen. 3; even with subsidies fuel still isn’t free and many fossil power generation buildings still spend tens of millions to sometimes even hundreds of millions on fuel costs every quarter. The only costs to renewable farms are paying the staff to keep them running smoothly. This really doesn’t need to be spoken of any further it’s actually pretty simple of a concept. I don’t know about you but I don’t think we can afford the costs of gas being 6x what it was as of 2016, and damn straight not what 6x the price of it would be now in 2022. More people are going into poverty every day right now. Those along with a plethora of other superiorities make it, actually, the *abstaining* from renewables as a major energy supplier is about politics and not common sense. Common sense makes it renewables, when discussing Solar as a homeowner’s ability to make at least a fraction of their own energy, Wind as a reliable and remarkably steady generator, and Hydro (although becoming less viable due to how fossil fuel plants have so much disturbed rainfall patterns globally) as a powerful and steady primary, is the optimal. And then if we can figure out undersea power which takes advantage of ocean currents to power turbines… well, only a true imbecile would hate on that one.