It’s taken 50 years, since the dawn of the environmental movement for climate change to become popular science. That process has been slowed by ‘predatory delay,’ the deliberate financing of climate change denial science by companies like Exxon and Koch Industries. The science is still debated in some US states, which is a testament to the success of this strategy. The deliberate obfuscation of the urgent need to divest of fossil fuels is reflected in an ongoing commitment by most governments around the globe to continue to commit trillions of dollars in taxpayer subsidies per year to propping up an industry with a business model that is inherently self-destructive. As of 2017 the IMF was estimating a per annum increase in fossil fuel subsidies from $4trn to $5.2trn, amounting to ~6.5% of global GDP.
The subsidy figures published by the IMF in 2017, are skewed somewhat by the consolidation of ownership of large portfolios of fossil fuel reserves held by State-Owned Energy companies. In Russia, Saudi Arabia, Iran, Kuwait, Nigeria and Venezuela fossil fuel companies are so fundamentally intertwined with the state that it’s hard to measure the financial stability of one without the other. It’s even been argued of late that the US shale industry has grown to comprise such a large portion of the US labour force that to let it die out in the wake of oil price volatility would further harm the US economy. With the recent $2 trillion aid package to distressed citizens and businesses in the wake of COVID-19, we could see another victory for the status quo — fossil fuel companies already running on corporate welfare, seeking additional state aid from the taxpayer to prop up distressed (and stranded) assets.
Sure the renewable energy sector has benefited from state support too. So has IBM, Google, Facebook, Palantir, Microsoft and many other titans of American industry, including all the largest US investment banks. It’s an open secret that when it comes to commercial success, most sectors depend on government support to reach the top. However, most sectors don’t threaten to annihilate every living thing on planet earth at an accelerating rate, in the same way that fossil fuels do. Most sectors also don’t depend on a quarterly drip feed of incentives and tax reliefs just to keep their wheels turning.
It’s high time we eliminate all fossil fuel subsidies from government spending everywhere. To say that fossil fuel subsidization is a moral hazard is too polite. Fossil fuel subsidies are just plain dumb. The figures on cumulative global subsidization to fossil fuels since fossil fuel subsidies began remains an MSc dissertation to-be-written. Currently at $5trn per year over 10 years, the figure stands at $50trn. That’s 10x the amount of investment that the IEA projects is needed in clean energy by 2030 to meet decarbonization targets outlined in the Paris Climate Agreement.
Ultimately, climate change is a symptom of a failed energy-economic system — a system maintained by misinformation, propped up by corporate welfare and on the verge of bankrupting the public purse. We continue to consent to use of taxpayer funds in support of fossil fuel companies at our peril.