Come on, George: end the pernicious fossil fuel subsidies
While the Coalition squabbled this week over George Osborne’s call to slash subsidies to onshore wind farms, a similar – but very different – demand was taking the world by Twitter storm. #EndFossil FuelSubsidies trended top in the United States and number two globally during a campaign backed by celebrities such as Stephen Fry and Robert Redford.
It made a good point. It is clearly right that the Government should – as The Sunday Telegraph disclosed this week – aim to eliminate onshore wind subsidies by 2020, as costs fall, even if the Chancellor’s plans for a 25 per cent cut immediately may be too drastic. But why do governments do nothing about the far bigger bungs given to polluting oil, gas and coal?
Consumer subsidies for these alone top $400 billion (£256 billion) worldwide and are rising fast. Direct subsidies to producers add another $375 billion. Stir in the indirect military costs of protecting oil supplies and the toll on health services from pollution and the total bill is around $1 trillion. By contrast, global subsidies for wind weigh in at a proportionately puny $66 billion.
And while there is some justification for subsidising wind and other renewables as new technologies until they find their feet, this scarcely applies to the fossil fuels we have relied on for well over two centuries. World leaders have begun to wake up to this massive market distortion; the subsidies were condemned, for example, by the recent G8 summit. So when will Mr Osborne act?
There\’s a significant problem here Geoff me old mate.
Osborne has control of the UK\’s tax and subsidy system. It\’s not the UK\’s tax and subsidy system that provides the subsidies to fossil fuels. Proof here. Thus Osborne can do little about the subsidies in subsidy systems that he doesn\’t control.