This preview shows page 1. Sign up to view the full content.
Unformatted text preview: s emissions. Most subsidies come
from its poor and middle-income members (see chart). The International Energy
Agency reckons that poor countries, defined as those outside the Paris-based
Organisation for Economic Co-operation and Development (OECD), spend $310
billion a year on such subsidies, mainly for petrol. That supposedly helps the poor.
But Fatih Birol, the IEA’s chief economist, says that the subsidies mainly benefit
middle-income and higher-earning urban types; the rural poor use little fossil fuel.
The G20 said the money spent on subsidies could help the poor in other, more
Subsidising fossil fuels has many flaws. If
imported, they may increase a country’s
energy dependence on risky outside
supplies. In big oil-producing countries,
such as Iran (which is not a G20 member)
and Saudi Arabia (which is), subsidies are
especially high. They drain public coffers
and encourage wasteful domestic
consumption, using petrol that could be
better sold for export.
Rich countries subsidise fossil fuels too, but
by much less—the OECD estimates around
$20 billion-$30 billion annually. A new
report by the Environmental Law Institute, a
think-tank, says that America spent $72
billion on fossil-fuel subsidies from 2002 to
2008. But these are production subsidies.
American oil companies earn a tax credit at
home for royalties (of up to 85% in some
cases) paid on...
View Full Document
This document was uploaded on 03/09/2014 for the course ASTRO 3730 at Colorado.
- Winter '14