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Unformatted text preview: oil extracted abroad. The
provision is intended for companies to avoid
double taxation, but acts as a windfall for
the oil industry. Other subsidies, such as
paying for poor families’ heating oil, are
more defensible. But the G20 agreed that all
subsidies that encourage wasteful
consumption must go.
The IEA, along with the OECD, reckons that
eliminating fossil-fuel subsidies would result in a 10% reduction in global
greenhouse-gas emissions by 2050. Given a broad consensus around the need to
reduce emissions by 50% by that year, to keep global warming at around 2°C, Mr
Obama called the emissions cuts that would come from scrapping subsidies a good
The political details will be tricky. Subsidies have their defenders, often on
the political left. In 2008, amid high oil prices, countries such as Egypt, India About our new page
All science and technology http://www.economist.com/world/international/displaystory.cfm?story_id=14540043 10/7/2009...
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- Winter '14