Energy subsidies are actions that keep prices for consumers below the market level or for producers above the market level, or reduce costs for consumers and producers. Energy subsidies can be in the form of direct cash transfers to producers, consumers or related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates, price controls, trade restrictions, and market access restrictions. They may also include energy conservation subsidies. The development of today's major modern energy industry all depends on substantial subsidy support.
Global fossil fuel subsidies represent 6.5% of global GDP by 2015. The abolition of these subsidies is widely seen as one of the most effective ways to reduce global carbon emissions.
Video Energy subsidies
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The main arguments for energy subsidies are:
- Supply - subsidized security is used to ensure adequate domestic supply by supporting the production of native fuel to reduce import dependence, or support the activities of overseas national energy companies.
- Environmental improvements - subsidies are used to reduce pollution, including different emissions, and to meet international obligations (eg the Kyoto Protocol).
- Economic benefits - subsidies in the form of price reductions are used to stimulate certain sectors or economic segments of the population, eg. alleviate poverty and improve access to energy in developing countries.
- Employment and social benefits - subsidies are used to keep jobs, especially during the economic transition period.
The main arguments against energy subsidies are:
- Some energy subsidies against sustainable development goals, as they can lead to higher consumption and waste, exacerbate the harmful effects of energy use on the environment, create heavy burdens on government finances and undermine economic potential to grow, undermine private and public investment in the energy sector. Also, most of the benefits of fossil fuel subsidies in developing countries go to the richest 20% of households.
- Inhibits the expansion of distribution networks and the development of more environmentally friendly energy technologies, and does not always help those most in need.
- Research conducted by the World Bank found that subsidies for large commercial businesses that dominate the energy sector are not justified. However, in some circumstances, it makes sense to use subsidies to promote access to energy for the poorest households in developing countries. Energy subsidies should encourage access to modern energy sources, not to cover operating costs. A study conducted by the World Resources Institute found that energy subsidies often go to capital-intensive projects at the expense of smaller or distributed alternatives.
The types of energy subsidies are:
- Direct financial transfers - grants to producers; grants to consumers; low interest or preferential loans to producers.
- Preferential tax treatment - rebates or exemptions on royalties, duties, user charges and tariffs; Tax credit; accelerated depreciation allowances on energy supply equipment.
- Trade restrictions - quotas, technical limitations, and trade embargoes.
- Energy-related services provided by the government at a cost less than - a direct investment in energy infrastructure; research and public development.
- Regulation of the energy sector - demand guarantee and mandatory deployment rate; price control; restrictions on market access; preferential planning approval and control over access to resources.
- Failure to impose external costs - the cost of environmental externalities; energy security risks and price volatility costs.
- Deplesion Allowance - allows for a reduction of gross revenue up to ~ 27% for depletion of depleted resources (oil, gas, minerals).
A 2016 study estimates that global fossil fuel subsidies are $ 5.3 trillion by 2015, representing 6.5% of global GDP. The study found that "China is the largest subsidy in 2013 ($ 1.8 trillion), followed by the United States ($ 0.6 trillion), and Russia, the EU and India (each with about $ 0, 3 trillion). " The authors estimate that the abolition of "subsidies will reduce global carbon emissions by 2013 by 21% and 55% fossil fuel air pollution losses, while increasing 4% incomes, and social welfare by 2.2%, of global GDP." According to the International Energy Agency, the abolition of worldwide fossil fuel subsidies will be one of the most effective ways to reduce greenhouse gases and fight global warming. In May 2016, the G7 countries set for the first time a deadline to end most of the fossil fuel subsidies; said the government's support for coal, oil and gas should end in 2025.
According to the OECD, subsidies that support fossil fuels, particularly coal and oil, pose a greater environmental threat than subsidies for renewable energy. Subsidies for nuclear power contribute to unique environmental and safety issues, particularly related to the risk of high levels of environmental damage, even though nuclear power contributes positively to the environment in the areas of air pollution and climate change. According to Fatih Birol, Chief Economist at the International Energy Agency without a gradual reduction of fossil fuel subsidies, countries will not meet their climate targets.
A 2010 study by the Global Subsidies Initiative compares global relative subsidies from various energy sources. The results show that fossil fuels receive 0.8 US cents per kWh of the energy they produce (although it should be noted that estimates of fossil fuel subsidies apply only to consumer subsidies and only in non-OECD countries), nuclear energy receives 1.7 sen/kWh, renewable energy (excluding hydropower) received 5.0 cents/kWh and biofuels received 5.1 cents/kWh in subsidies.
In 2011, IEA chief economist Faith Birol said that currently $ 409 billion equivalent of a fossil fuel subsidy encourages wasteful energy use, and subsidy cuts are the biggest policy item that will help renewable energy gain more market share and reduce CO < sub> 2 emissions.
Maps Energy subsidies
The impact of renewable energy subsidies
Global renewable energy subsidies reached $ 88 billion in 2011. According to the OECD, subsidies for renewable energy are generally considered more environmentally friendly than fossil fuel subsidies, although a wide range of environmental effects must be taken into account.
IEA position on subsidy
According to the International Energy Agency (IEA) (2011) energy subsidies artificially lower the energy prices paid by consumers, raise prices received by producers or lower production costs. "The cost of subsidizing fossil fuels is generally greater than the benefits: subsidies for renewable energy and low-carbon energy technologies can bring long-term economic and environmental benefits." In November 2011, the IEA report titled Spreading Renewable Energy 2011 says "subsidies in uncompetitive green energy technologies are justified to provide incentives to invest in technology with clear environmental and energy security benefits". The IEA report does not agree with claims that renewable energy technologies are only via via expensive subsidies and unable to generate energy reliably to meet demand. "The portfolio of renewable energy technologies becomes cost competitive in an increasingly widespread situation, in some cases providing investment opportunities without requiring certain economic support," the IEA said, adding that "cost reductions in important technologies, such as wind and solar, are set to continue. "
Fossil fuel consumption subsidies were $ 409 billion by 2010, half oil products. Renewable energy subsidies are $ 66 billion in 2010 and will reach $ 250 billion by 2035, according to the IEA. Renewable energy is subsidized to compete in the market, increase its volume and develop technology so that subsidies become unnecessary with development. Eliminating fossil fuel subsidies can bring economic and environmental benefits. The phased elimination of fossil fuel subsidies by 2020 will cut 5% primary energy demand. Since early 2010, at least 15 countries have taken steps to stop fossil fuel subsidies. According to the IEA, the ground wind can be competitive around 2020 in the European Union.
According to the IEA, the abolition of fossil fuel subsidies, more than $ 500 billion annually, will reduce 10% of greenhouse gas emissions by 2050.
Subsidies by country
The International Energy Agency estimates that the government subsidizes fossil fuels up to US $ 548 billion in 2013. Ten countries account for nearly three quarters of this figure. At their meeting in September 2009, the G-20 countries committed to "rationalize and abolish the inefficient intermediate fossil fuel subsidies that encourage wasteful consumption". The year 2010 has seen many countries reduce energy subsidies, for example in July 2014 Ghana abolished all diesel and gasoline subsidies, while in the same month Egypt raised diesel prices 63% as part of a reform raft aimed at removing subsidies within 5 years.
The public energy subsidy for energy in Finland in 2013 is EUR700 million for fossil energy and EUR60 million for renewable energy (especially wood and wind).
United States
According to the testimony of the Congressional Budget Office, about three-quarters of the projected cost of tax preference for energy by 2016 is for renewable energy and energy efficiency. An estimated $ 10.9 billion is directed to renewable energy; $ 2.7 billion, go to energy efficiency or power transmission. Fossil fuels account for most of the rest of the energy tax-related preference costs - about $ 4.6 billion.
According to a 2015 forecast by the Obama administration, the US oil industry benefits from a subsidy of about $ 4.6 billion per year. A 2017 study by researchers at the Stockholm Environment Institute published in the journal Nature Energy estimates that nearly half of US oil production would be unprofitable without subsidies.
Subscription allocation in the United States
On March 13, 2013, Terry M. Dinan, senior adviser at the Congressional Budget Office, testified before the Energy Committee's Subcommittee on Science, Space and Technology at the US House of Representatives that federal energy tax subsidies would cost $ 16.4 billion that fiscal year , is described as follows:
- Renewable energy: $ 7.3 billion (45 percent)
- Energy efficiency: $ 4.8 billion (29 percent)
- Fossil fuels: $ 3.2 billion (20 percent)
- Nuclear energy: $ 1.1 billion (7 percent)
In addition, Dinan testified that the US Department of Energy will spend an additional $ 3.4 billion on financial support for energy technology and energy efficiency, described as follows:
- Energy efficiency and renewable energy: $ 1.7 billion (51 percent)
- Nuclear energy: $ 0.7 billion (22 percent)
- Research on fossil energy & amp; development: $ 0.5 billion (15 percent)
- Agency for Advanced Research Projects - Energy: $ 0.3 billion (8 percent)
- Power delivery and energy reliability: $ 0.1 billion (4 percent)
A 2011 study by consulting firm Information Management Services, Inc. (MISI) estimates total federal subsidy history for various energy sources over the years 1950-2010. The study found that oil, natural gas and coal received $ 369 billion, $ 121 billion, and $ 104 billion (2010 dollars), respectively, or 70% of the total energy subsidies during that period. Oil, natural gas and coal greatly benefit from percentage depreciation allowances and other tax-based subsidies, but oil also benefits greatly from regulatory subsidies such as the exclusion of price controls and higher returns than the average permitted on oil pipelines. The MISI report found that non-hydroelectric (especially wind and solar) renewables benefited from $ 74 billion in federal subsidies, or 9% of the total, mostly in the form of federal tax policies and direct spending on research and development (R & D). Nuclear power benefits from $ 73 billion in federal subsidies, 9% of the total, mostly in the form of R & D, while hydropower receives $ 90 billion in federal subsidies, 12% of the total.
A 2009 study by the Environmental Law Institute assessed the size and structure of US energy subsidies in 2002-08. The study estimates that subsidies for fossil fuel based sources amount to about 72 billion dollars during this period and subsidies for renewable fuel sources reach $ 29 billion. This study does not assess subsidies that support nuclear energy.
The three largest fossil fuel subsidies are:
- Foreign tax credit ($ 15.3 billion)
- Credits for non-conventional fuel production ($ 14.1 billion)
- Oil and gas exploration and development costs ($ 7.1 billion)
The three largest renewable fuel subsidies are:
- Alcohol Credits for Fuel Excise Tax ($ 11.6 billion)
- Renewable Electricity Production Credits ($ 5.2 billion)
- Corn Based Ethanol ($ 5.0 billion)
In the United States, the federal government has paid US $ 74 billion for energy subsidies to support R & D for nuclear power ($ 50 billion) and fossil fuels ($ 24 billion) from 1973 to 2003. During this same time period, renewable energy technology and energy efficiency received a total of US $ 26 billion. It has been suggested that subsidized shifts will help match the playing field and support the growth of the energy sector, which is solar, wind, and biofuels. However, many of the "subsidies" available to the oil and gas industry are general business opportunity loans, available to all US businesses (in particular, the foreign tax credits mentioned above). The value of industry-specific subsidies (oil, gas and coal) in 2006 was estimated by the Texas State's Financial Supervisor to be $ 6.25 billion - about 60% of the amount calculated by the Environmental Law Institute. The balance of federal subsidies, which is controlled by a $ 7.4 billion monetary supervisor, comes from credits and joint reductions, and oil defense (spending on Strategic Petroleum Reserve, energy infrastructure security, etc.).
Critics allege that the most important subsidies to the nuclear industry do not involve cash payments, but rather shift in construction costs and operating risks from investors to taxpayers and taxpayers, weighing them with risks including cost swelling, default for accidents, and nuclear waste management. Critics claim that this approach distorts market choices, which they believe would otherwise support less risky energy investments.
Many energy analysts, such as Clint Wilder, Ron Pernick and Lester Brown, have suggested that energy subsidies need to be shifted from mature and established industries and toward high growth net energies. They also suggest that such subsidies should be reliable, long-term and consistent, to avoid periodic difficulties experienced by the wind industry in the United States.
A 2012 study by researchers at the Breakthrough Institute, the Brookings Institution and the World Resources Institute estimates that between 2009 and 2014 the federal government will spend $ 150 billion on clean energy through a combination of direct spending and tax spending. Renewable electricity (especially wind, solar, geothermal, hydro, and tidal energy) will account for the bulk of this expenditure, 32.1%, while spending on liquid biofuels will be the next largest share, 16.1%. Expenditures for various forms and other forms of clean energy, including energy efficiency, electric vehicles and advanced batteries, high-speed trains, power grids and transport, nuclear, and advanced fossil fuel technologies, will include a remaining share of 51.8%. In addition, the report found that federal measures that do not exist, spending on clean energy will decline by 75%, from $ 44.3 billion in 2009 to $ 11.0 billion in 2014.
The role of the United States government in the development of a new energy industry
From civilian nuclear power to hydro, wind, sun, and shale gas, the United States federal government has played a central role in the development of a new energy industry.
The American nuclear power industry, which currently supplies about 20% of the country's electricity, came from the Manhattan Project to develop atomic weapons during World War II. From 1942 to 1945, the United States invested $ 20 billion (dollars 2003) into a massive nuclear research and dissemination initiative. But the achievement of the first nuclear weapons test in 1945 marked the beginning, not the end, of federal involvement in nuclear technology. President Dwight D. Eisenhower's "Atoms for Peace" speech in 1953 and the 1954 Atomic Energy Act of the United States to develop peaceful uses for nuclear technology, including commercial energy generation. The new National Laboratory System, established by the Manhattan Project, is maintained and expanded, and the government pours money into nuclear energy research and development. Recognizing that research is insufficient to spur the development of newly capital-intensive industries, the federal government creates financial incentives to spur nuclear energy. For example, the Anderson Price Act of 1957 limited the responsibility of a nuclear energy company in the event of a serious accident and helped the company secure capital with federal loan guarantees. In the favorable environment created by such incentives, more than 100 nuclear plants were built in the United States in 1973.
Commercial wind power, currently one of the fastest growing energy sectors, is also possible through government support. In the 1980s, the federal government pursued two R & amp; D for the development of wind turbines. The first is the "great science" effort by NASA and the Department of Energy (DOE) to use US expertise in research and high-tech products to develop new large-scale wind turbines for power generation, mostly from scratch. R & amp; The more successful second D, sponsored by DOE, focuses on component innovation for small turbines using existing turbine operating experience to inform future research agenda. The joint research project between government and private companies generates a number of innovations that help improve the efficiency of wind turbines, including bent blades and special purpose airfoils. R & amp; D funded publicly coupled with efforts to build a domestic market for new turbines. At the federal level, this includes tax credits and the passage of the Public Policy Rules Act (PURPA), which requires companies to purchase electricity from some small renewable energy generation at a cost that is avoided. Both federal and state support for the development of wind turbines helped keep costs low, but policy incentives at both the federal and state levels were stopped by the end of the decade. However, after a five-year federal policy absence in the late 1980s, the US government adopted a new policy to support the industry in the early 1990s. National Renewable Energy Laboratory (NREL) continues its support for R & amp; D, and also launched the Sophisticated Wind Turbine Program (AWTP). The goal of AWTP is to reduce wind power costs to a level that can compete in the US market. Policymakers also introduced new mechanisms to spur demand for new wind turbines and boost the domestic market, including 1.5 cents per kilowatt-hour tax credit (adjusted over time for inflation) included in the 1992 Energy Policy Policy. Today the major wind industry subsidy support comes from federal production tax credits.
The development of commercial solar power also depends on government support. Solar PV technology was born in the United States, when Daryl Chapin, Calvin Fuller, and Gerald Pearson at Bell Labs first demonstrated silicon photovoltaic solar cells in 1954. The first cells recorded a four percent efficiency, much lower than typical 25 percent efficiency. of some crystalline silicon cells today. With unreachable costs for most applications, new technology developers must find another place for the initial market. Apparently, solar PV indeed makes economic sense in one market segment: aerospace. The US Army and Air Force view this technology as an ideal resource for secret projects on satellites orbiting the Earth. The government contracted with Hoffman Electronics to provide solar cells for its new space exploration program. The first commercial satellite, Vanguard I, was launched in 1958, equipped with silicon solar cells and chemical batteries. In 1965, NASA used nearly one million solar PV cells. Strong government demand and initial research support for solar cells resulted in dramatic reductions in technology costs and performance improvements. From 1956 to 1973, the price of PV cells decreased from $ 300 to $ 20 per watt. Beginning in the 1970s, when costs decreased, manufacturers began to manufacture solar PV cells for terrestrial applications. Solar PV invented a new niche in areas far from the grid where electricity is needed, such as the oil rig and Coast Guard lighthouse. The government continued to support the industry until the 1970s and early 1980s with new R & D efforts. D under President Richard Nixon and Gerald Ford, the Republic, and President Jimmy Carter, a Democrat. As a direct result of government involvement in solar PV development, 13 of the 14 top innovations in PV over the past three decades have been developed with the help of the federal dollar, nine of which are fully funded by the public sector.
Recently in addition to nuclear, wind, or solar, the development of the shale gas industry and the subsequent boom in shale gas development in the United States is possible through government support. The history of shale gas fractioning in the United States is interspersed by successive developments of massive hydraulic fractures (MHF), microseismic imaging, horizontal drilling, and other key innovations that, when combined, make the once affordable energy source technically recoverable. Throughout each stage of the innovation pipe - from basic research to R & D implementation D to cost sharing on demonstration projects to support tax policies for public-private partnerships and federal investments helped drive the hydraulic fracture in shale into full commercial competitiveness. Through a combination of federal government-funded geological research beginning in the 1970s, public-private collaboration on demonstration projects and R & D priorities D, and tax policy support for unconventional technology, the federal government plays a key role in the development of shale gas in the United States. Union.
Investigations have revealed the government's important role in the development of technology and other energy industries, including aviation and jet engines, synthetic fuels, sophisticated natural gas turbines, and advanced diesel internal combustion engines.
Venezuela
In Venezuela, energy subsidies are equivalent to about 8.9 percent of the country's GDP in 2012. Fuel subsidies are 7.1 percent while electricity subsidies are 1.8 percent. To fund this, the government uses about 85 percent of its tax revenues for this subsidy. It is estimated that subsidies have caused Venezuela to consume 20 percent more energy than without them. Fuel subsidies are given more to the richest part of the population that consumes the most energy. The fuel subsidy maintains a cost of about $ 0.01 US for a liter of gasoline at the pump since 1996 until president Nicolas Maduro reduced the national subsidy in 2016 to make it around $ 0.60 US per liter (Local currency is Bolivar and the price per liter gas is 6 Bolivars). Fuel consumption has improved overall since the 1996 policy began even though oil production has fallen by more than 350,000 barrels per day since 2008 under the policy. PDVSA, the Venezuelan state oil company, has lost money on these domestic transactions since the introduction of these policies. These losses can also be attributed to the 2005 Petrocaribe agreement, in which Venezuela sells many surrounding countries for cheaper or cheaper prices; essentially a subsidy by Venezuela for the states that are part of the treaty. Fossil fuel subsidy and the consequent low cost of fuel at the pump have led to the creation of a large black market. Criminal groups are smuggling fuel from Venezuela to adjacent countries (especially Colombia). This is because of the huge profits that can be gained by this action, as fuel is much more expensive in Colombia than in Venezuela. Despite the fact that the issue is already well known in Venezuela, and insecurity in this region is on the rise, the state has not lowered or eliminated this fossil fuel subsidy.
Russian
Russia is one of the world's energy powers. It has the largest natural gas reserves in the world (27% of total), the second largest coal reserves, and the eighth largest oil reserves. Russia is the third largest energy subsidy in the world by 2015. The country subsidizes electricity and natural gas and oil extraction. About 60% of the subsidies go into natural gas, with the remainder being spent on electricity (including below the price of gas delivered to power plants). For oil extraction, the government provides tax exemptions and duty reductions of about 22 billion dollars annually. Some tax exemptions and duty deductions also apply to natural gas extraction, although the majority is allocated to oil. In 2013 Russia offers the first subsidies for renewable electric generators. Russia's large subsidies are expensive and it is advisable to help the economy that Russia lowers its domestic subsidies. However, the elimination of potential energy subsidies in Russia carries the risk of social unrest that makes the Russian authorities reluctant to remove them.
European Union
In February 2011 and January 2012, the United Kingdom's Energy Group, supported by other environmental organizations and activists, filed an official complaint to the EU's Directorate General of Competition, alleging that the Government provided unlawful state aid in the form of subsidies to the nuclear power industry, competition law of the European Union.
One of the biggest subsidies is the limitation of liability for nuclear accidents that have been negotiated by the nuclear power industry with the government. "Like a car driver, the operators of nuclear plants must be properly insured," said Gerry Wolff, coordinator of the Energy Fair group. The group calculates that, "if the nuclear operator is fully insured against the cost of a nuclear disaster such as that occurring in Chernobyl and Fukushima, the price of nuclear electricity will rise by at least EUR0.14 per kWh and possibly as much as EUR2.36, depending on the assumptions made". According to the latest statistics, subsidies for fossil fuels in Europe are exclusively allocated to coal (EUR10 billion) and natural gas (EUR6 billion). Oil products do not receive any subsidies.
See also
- Company prosperity
- Integrated building photovoltaic # Government subsidy
- Feed-in rate
- Gasoline subsidies
- Renewable Energy Certificate
- Commercialization of renewable energy # Non-technical barriers to reception
- Payment of renewable energy
- Blocked assets
- Financial incentives for photovoltaics
References
External links
- Energy Subsidy Reform - UNEP (2008)
- European countries spend billions per year on fossil fuel subsidies, survey shows (2017)
Source of the article : Wikipedia
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