The problem with fossil fuel subsidies

"According to reports from 2013(1) , outdoor air pollution is the most toxic environmental carcinogen, killing 6.5 million people every year, more than passive smoking. The problem’s main culprit has long been identified: fossil fuels. But whereas anti-smoking policies and the fight against tobacco have made considerable progress in the last decade and attracted the support of policy makers across subject areas, the fight against air pollution has only just begun. The reasons for political short-sightedness and policies that keep working against the public interest are similar to those that prevailed with tobacco in the past: a lack of awareness on the one hand and powerful commercial interests that keep oil, gas and coal central to our energy mix on the other hand. This results in policies that drive producer’s profits whilst leaving ordinary people to deal with the aftermath.

Over the past 20 years in Europe, recognition is growing that air pollution is a public health concern - per se and also because of the fact that climate change is making air pollution worse and vice versa. The resulting health impacts are serious and have both imminent and longterm effects. On a short-term basis air pollution represents a serious health risk to people worldwide by causing respiratory and heart diseases and premature death. But in the longer term, it is climate change that poses great risks to human health and is widely considered the greatest health threat in the 21st century.(2) The interconnectedness of these two threats caused by our dependence on fossil fuels results in the urgent need to act if we are to assure life on earth for future generations.

Scientists have determined that at least two-thirds of the world’s current, proven reserves of oil, gas, and coal must not be burned if we are to avoid raising global temperatures above two degrees Celsius (with 1.5 degrees being the world’s preferred scenario). While fossil fuels have played a crucial part in powering the world economy and delivering unprecedented affluence to huge numbers of people since the 18th century, those same fuels are now threatening life on earth.

This scientific recognition has not yet fully translated into policy change: each year roughly 444 billion USD in tax money are handed out by the world’s wealthiest governments (the G20) to the fossil fuel Industry. Globally this number is even higher. This industry then expands and releases more carbon emissions, impeding our ability to keep temperature rise below the crucial 1.5 degrees Celsius, as well as increasing acid rain, air pollution and the risk of oil spills. Hundreds of individual policies assure that the oil, gas and coal industry keeps operating worldwide at a time when the world needs to reduce its carbon footprint.(3) Some research even aims to show that between 1980 and 2010, subsidies to fossil fuels have driven 36 percent of global carbon emissions meaning that if we had eliminated fossil fuel subsidies back then, global carbon emissions would be a third lower than they were in 2010.(4)

But in addition to increasing CO2 emissions, subsidising this harmful industry had another hidden price tag. It damages public health by increasing air pollution and the health risks associated with climate change. It also puts a burden on health systems and government budgets overall by locking in billions of funds that could be used more efficiently for public services such as health, education or overall poverty reduction. In many countries, the health costs associated with air pollution are often many times higher than the government subsidies paid to producers. Fossil fuel subsidies increase the price gap between fossil fuels and renewable energies, making fossil fuels appear cheaper and increasing their consumption while decreasing incentives for producers and ultimately consumers to switch to renewable and healthier energies, which on average receive only a quarter of the support given to oil, gas and coal in the world’s wealthiest 20 nations."

 

(1) IARC. ‘Outdoor air pollution a leading environmental cause of cancer deaths’, October 2013, www.iarc.fr/en/mediacentre/iarcnews/pdf/pr221_E.pdf

(2) Watts N, Adger W, Ayeb-Karlsson, S, et al. ‘The Lancet Countdown: tracking progess on health and climate change’, The Lancet, 2017, www.thelancet.com/journals/lancet/article/ PIIS0140-6736(16)32124-9/abstract

(3) Organisation for Economic Co-operation and Development (OECD). ‘OECD Companion to the Inventory of Support Measures for Fossil Fuels 2015’, September 2015, www. oecd-ilibrary.org/energy/oecd-companion-to-the-inventory-ofsupport-measures-for-fossil-fuels-2015_9789264239616-en

(4) Stefanski R. ‘Into the mire: A closer look at fossil fuel subsidies’, September 2015, research-repository.st-andrews. ac.uk/bitstream/handle/10023/9833/Stefanski_Mire_ AM.pdf?sequence=1

  

Excerpt of: The Health and Environment Alliance (HEAL), Hidden Price Tags. How ending fuel subsidies would benefit our health, 2017.

 

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