[UPDATE: Please do note that the image above is not from the FT account below, and is really just eye candy for this post. Sorry for any confusion, and thanks to several commentors!]Today's FT has this mind-boggling statistic:
Even though the G20 nations agreed last year to phase out fossil fuel subsidies, real policy action in that direction has yet to occur. Consider that the Kerry-Lieberman bill in the Senate -- the climate bill -- would add hundreds of billions of dollars in subsidies for fossil fuels. Remarkably, this bill is being championed by mainstream environmental groups and the Obama Administration.The IEA estimates that in 2008 – the latest year for which data are available – 37 large developing countries spent about $557bn in energy subsidies, according to a draft seen by the Financial Times. Previous estimates put it at about $300bn. Iran, Russia, Saudi Arabia, India and China top the ranking, according to the report.
Some of the biggest spenders, including Saudi Arabia and China, recently warned of the need to cut subsidies over the medium term. . .
The IEA estimates that energy consumption could be reduced by 850m tonnes equivalent of oil – or the combined current consumption of Japan, South Korea, Australia and New Zealand – if the subsidies are phased out between now and 2020. The consumption cut would save the equivalent of the current carbon dioxide emissions of Germany, France, the UK, Italy and Spain.
Critics of energy subsidies say they encourage wasteful consumption, reduce global energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.
They also claim that subsidies are a burden to national budgets, with spending on financial support to oil, natural gas and coal sometimes larger than education or health spending. The IEA says the 37 countries surveyed spent, on average, about 2.1 per cent of their GDP on energy subsidies.