By: John Brian Shannon
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G20 Hints to Eliminating Fossil Fuel Subsidies
by John Brian Shannon 16/11/14http://nowhydrogen.com
At the G20 Brisbane 2014 Summit leaders discussed elimination of the massive 600 billion dollars subsidy paid to the fossil fuel industry in 2014.AS THE G20 SUMMIT WRAPS UP IN BRISBANE, AUSTRALIA, LEADERS DISCUSSED THE EVENTUAL ELIMINATION OF THE MASSIVE GLOBAL SUBSIDIES PAID TO THE FOSSIL FUEL INDUSTRY WHICH TOPPED SOME 600 BILLION DOLLARS LAST YEAR, SLIGHTLY MORE THAN LAST YEAR'S 550 BILLION AND 2012'S 500 BILLION.Meanwhile, non-polluting renewable energy continues to receive peanuts - not even approaching 100 billion dollars worldwide.Clean energy does have it's detractors, similar to the criticisms levelled by the detractors of aircraft travel 100 years ago when people were more used to traveling by ship and by train. "The times, they are a'changin'," applies in this century too!"We do it this way, because we've always done it this way," is no longer good enough. The fossil fuel industry provides the fuel for the world's transportation industry and it is the most heavily subsidized industry on the planet and has been given carte blanche to operate in any way it sees fit.
Fine. We needed the oil, whatever has taken place has taken place with our tacit approval. But with the very real effects of climate change now upon us, not to mention the more poignant effects on human health by breathing polluted air and drinking fracked water, fossil fuel now requires a relook.It's not just climate and individual health concerns that are driving the discussion, health care systems around the world are now realizing that a good portion of disease and mortality are directly relatable to environmental factors. In major industrialized nations, billions of dollars in health care dollars are spent to repair the damage to people's health caused by fossil fuel emissions. It's not a few billion 'here and there' it may be as high as 1/3rd of all health care spending in the world's most industrialized nations.THE COST OF FOSSIL IS BECOMING A VERY LARGE NUMBER FOR EVEN THE RICHEST COUNTRIES
* CLIMATE: For each 1 degree of climate increase the world will spend 1 trillion dollars to counter agricultural and reservoir drought, sea level rise, abnormal storm activity and for land remediation.
* HEALTH: Our sophisticated health care systems can now argue with more accurate statistical proofs that fossil fuel burning contributes to human mortality and disease than in decades past.
* COSTS: 600 billion dollars in subsides is a lot for the world's nations to bear. And that number continues to grow each year as all of the 'easy oil' and 'easy gas' is already tapped and locations with special extraction methods must be employed.
FROM THE G20 ENERGY SUSTAINABILITY WORKING GROUP 2014, CO-CHAIR'S REPORT
Inefficient fossil fuel subsidies
G20 members reported to G20 finance ministers in September on their progress towards meeting the G20 commitment, initially made at the 2009 Pittsburgh summit and reaffirmed at subsequent summits, to " rationalize and phase out inefficient fossil fuel subsidies that encourage wasteful consumption over the medium term." The ESWG benefitted from updates on the preparations for the first round of voluntary peer reviews involving the United States and China. A second round of voluntary peer reviews involving other G20 countries is expected to commence in mid - 2015. Germany has announced it will participate in the second round.
In response to a request from leaders at the 2013 Saint Petersburg summit, the ESWG tasked the World Bank Group, in consultation with other relevant international organisations, to prepare a report on transitional policies to assist the poor while phasing out inefficient fossil fuel subsidies that encourage wasteful consumption. The World Bank Group provided regular updates to the ESWG through the year and the final report was delivered to finance ministers in September. - Read the full report here.
IT LOOKS LIKE 'BUSINESS AS USUAL' IS SET TOWARDS CHANGE IN THE ENERGY INDUSTRYOnly fossil fuel superpowers Australia "(coal)," Canada "(coal, oil, tar-sands petroleum, fracked gas and conventional gas, deepsea oil extraction)", and Saudi Arabia "(oil)," alone out of the G20 did not see fit to endorse the Energy Sustainability Working Group 2014 report.No surprise there. However, the day is coming when" the costs of not switching" to clean energy will far exceed" the costs of switching." If all energy subsidies (fossil fuel subsidies "and" renewable energy subsidies) were magically and instantly removed - that day would be today.
Welcome to JohnBrianShannon.com. On the Editorial Board at ArabianGazette.com and Kleef.asia. The UNDP published me in 2012. Kind-heart, fun guy, communicator, cosmopolitanist. Can be serious if absolutely required.
"Says subsidy allows wind developers to grant departure electricity and silence make a go again, which can support the continued exploit of 25 percent of our nuclear plants"
"THE Massive TAXPAYER Promote TO WINDMILL DEVELOPERS EXPIRED JAN. 1. A Precisely WAY TO Remember THE NEW Court WOULD BE TO NOT Clean IT AND TO Douse THE Central Statement BY 60 BILLION, AN Measurement A propos Corresponding TO THE Expenditure IN THE Additional Reduction Endorse." - LAMAR ALEXANDER
MARYVILLE, Jan. 3 - U.S. Senator Lamar Alexander (R-Tenn.) at the moment believed Assembly require not renew the taxpayer subsidy for wind turbines and use the 60 billion saved to fit the central charge.
He believed the wind production tax credit, which expired Jan.1, provided a subsidy "so benevolent that wind developers can grant departure electricity and silence make a go again, where undercutting cheaper and choice beneficial power from coal and nuclear plants. This hurtful pricing' rewards expensive, cynical power desire wind and punishes frugal, beneficial power from nuclear and coal plants." Alexander cited a revise by the Resources for Scale and Global Studies, which believed that constant the subsidy can make nuclear plants so uncompetitive that 25 percent of them can close to by 2020.
Alexander open four reasons to wear the wind subsidy to expire:
1. Means saved can fit the central debt:
"The supreme taxpayer subsidy to windmill developers expired Jan. 1. A good way to hang loose the New Court would be to not renew it and to fit the central charge by 60 billion, an price about indistinguishable to the spending in the new to the job reduced submission," Alexander believed. "For the taking into consideration 10 years, extending the tax credit one engagement at a epoch can beating 60 billion or choice, based on the record new to the job reality from The Concentrated Command on Taxation, about tolerable to pay for the 63 billion Assembly deceased in the of late accepted reduced submission."
2. At choice than 20 years old, the subsidy was want boring and unnecessary:
"The subsidy was put in organize in 1992 to jumpstart a technology, and according to the Obama administration's former energy secretary, the technology has pungent," Alexander believed. Former Flash Secretary Stephen Chu testified in 2011 that wind energy is a "widen technology."
3. The subsidy treated Tennessee and many states unfairly:
"A new to the job revise shows irresponsible wind subsidies missing Tennesseans who pay central assessment at a 52 million loss in 2012 - spit we get inordinately fleeting of the benefit for example the wind doesn't effect tolerable in the southeastern Ally States, and yet our central tax dollars go to finance Big Twist in other states," Alexander believed. According to the revise by the Association for Flash Trial, 30 states compensated choice to the central control for wind subsidies than wind producers in their states established. Tennessee's net loss was 52 million.
4. Windmills are a blemish on the arrange and use supreme amounts of land for the power they produce:
"At least amount in our angle of the land-living, windmills are a large blemish on the arrange - you can see their flashing lights for 20 miles," Alexander believed. "You would grip to whiz wind turbines the fantastic range of the Appalachian Traipse, from Maine to Georgia, to indistinguishable the power fashioned by eight nuclear plants on one suit mile each - and you would silence need the nuclear plants or precise other form of power generation for what the wind doesn't effect." Based on reality from the State-owned Renewable Flash Lab, if wind power were to gamble to carry the 20 percent of the Ally States' electricity that about 100 nuclear reactors without hesitation do, it would stand 150,000 two-megawatt wind turbines stretching the fantastic range of the earth's equator.
This report argues that when it comes to reducing the Renewable Energy Target, the winners will be the big power companies while the losers would be households.
Executive summary
The Renewable Energy Target (RET) is a policy designed-with bipartisan backing-to reduce carbon pollution from the electricty sector and build Australia's renewable energy industry. Both these objectives are vital to achieving decarbonisation in line with Australia's national interest in avoiding dangerous climate change, and positioning the economy to remain competitive in a world moving to clean energy sources.
Some power companies and industry associations are now calling for renewable energy investment to be cut back by reducing the RET. Others have called for the RET to be abolished completely.
These claims are false and a distraction from who really benefits from reducing the amount of clean renewable energy produced in Australia. Based on independent modelling by Jacobs (see accompanying technical report) we find that reduction of the large-scale renewable energy target as proposed by some power companies has the following impacts (all $2012)3: o $8 billion additional profit to coal and $2 billion to gas generators (net present value of future profits 2015- 2030). This is driven primarily by a 7 per cent increase in coal-fired power production and higher wholesale electricity prices. Under current ownership arrangements, EnergyAustralia is the company that stands to gain the most. EnergyAustralia's potential extra profit is worth about $1.9 billion if the RET is reduced (and $2.2 billion if it is abolished). However, if AGL purchases Macquarie Generation, it would become by far the biggest beneficiary of reducing the RET. The combined additional profits of AGL and Macquarie Generation would be worth $2.7 billion if the RET is reduced. Origin Energy's total extra profit would be about $1.5 billion. Origin owns the power station that would emit the largest amount of additional pollution under a reduced RET.
o No decline in electricity prices: in fact, they could increase slightly (wholesale prices increase by 15 per cent and retail prices by 2.5 per cent on average in the period to 2030). This is consistent with modelling commissioned by the Government and studies conducted independently by leading economic analysts.
o 150 million tonnes of additional carbon pollution by 2030, and 240 million tonnes by 2040. Higher levels of pollution lead to socialised costs we estimate conservatively to be $14 billion.
o $8 billion lost investment in new renewable energy capacity. New South Wales would be the biggest loser with over $2 billion in foregone investment. South Australia would lose over $2 billion and Queensland over $1 billion.
o $680 million of extra federal spending needed to reach Australia's minimum emission reduction target by 2020.
As this modelling demonstrates, reducing the RET is a step back from cleaner electricity generation that rewards owners of polluting coal stations at the expense of the wider community. Reducing the RET would improve the profits of power companies but escalate costs for the public through increased carbon pollution and the loss of billions of dollars of investment in the short term, without reducing electricity prices. Cutting the target would destabilise the policy environment for investors, which would raise the costs of power sector investment in the future. Outright abolition of the RET would further increase pollution and undermine clean energy investment.
Instead of reducing or abolishing the RET, the government should build on the policy's success in mobilising the development of clean energy. Australia's electricity sector needs to play its full role in achieving our long-term national interest in avoiding dangerous climate change and enhancing prosperity in a world of increasingly stringent carbon constraints.
