Renewable Energy Doesn’t Get More In Subsidies Than Fossil & Nuclear Energy Have Gotten, & Continue To Get

January 26th, 2018 by Jake Richardson

This article is part of our “CleanTechnica Answer Box” collection. For some reason, there are certain anti-cleantech talking points that get thrown around over and over that are absolute bunk. We got tired of dealing with the same myths repeatedly and also saw others who spent time responding to these untruths in many discussions on CleanTechnica and elsewhere could use some help more efficiently and effectively doing so, so at the suggestion of a reader we created this resource in the same vein as Skeptical Science’s responses to global warming & climate change myths.

Myth: renewable energy gets subsidies whereas fossil fuels and nuclear energy don’t.

Short answer: Fossil fuels and nuclear energy have gotten subsidies for decades. Actually, fossil fuels have received government subsidies for 100 or so years. These days, fossil fuel subsidies reportedly total approximately $5 trillion globally each year. Despite tremendous health costs, climate costs, and countless premature deaths caused by pollution, these super rich and overly mature industries receive subsidies that serve no genuinely useful purpose for society. Renewable energy also receives subsidies, but not to the same degree.

A highly misleading anti-cleantech talking point is that renewable energy “relies on government subsidies,” and that all of the renewable energy growth in recent years is attributable to them. In actuality, fossil fuels and nuclear power have been receiving government support for much longer than renewable energy has. They have received much more government subsidy historically speaking than renewables. And these dirty energy options continue to receive a tremendous amount of government support even though they are overripe industries in many regards.

In the United States alone, the petroleum and coal industries receive at minimum about $20 billion a year in various forms of financial support.

Claiming that renewables receive too much government support while neglecting to mention all of the subsidies fossil fuels get is a deliberate campaign of misinformation.

There have been many government subsidies for the petroleum industry and some have been active for a very long time.

In a document uploaded to the House Committee Ways and Means website, it is explained that a particular financial support, the intangible drilling oil & gas deduction, has been available to the petroleum industry for about 100 years.

“For all practical purposes, the option to expense or capitalize the intangible drilling expenditures has existed since the first income tax statute. Judicial recognition of the existence of the option for the year 1916 appears in Shaffer v. Comm.”

The US coal industry has also received considerable government support dating to 1932! One analysis came up with a total figure of at least $70 billion, and that was only for the last 60-some years, “Since 1950, the federal government has provided the coal industry with more than $70 billion (in constant 2007 dollars) in tax breaks and subsidies.”

In sum, global fossil fuel subsidies reportedly total approximately $5 trillion per year.

→ Related: Early Fossil Fuel & Nuclear Energy Subsidies Crush Early Renewable Energy Subsidies

Subsidies for What?

One of the key points of understanding one must consider about these fossil fuel subsidies is that they are not necessary. Fossil fuels don’t need any government support. Today, these subsidies exist to help fossil fuel companies enrich themselves at the taxpayers’ expense.

Wind power and solar power are often criticized incorrectly as financial burdens but the critics don’t include certain key facts like how how much they contribute to society. For example, wind power contributes positively to the US economy. “Wind has an annual economic impact of about $20 billion on the U.S. economy. The United States has a vast domestic resources and a highly-skilled workforce, and can compete globally in the clean energy economy.”

This positive financial impact is likely to grow. “According to the Wind Vision Report, wind has the potential to support more than 600,000 jobs in manufacturing, installation, maintenance, and supporting services by 2050.”

In particular, the installation of wind turbines can benefit people living in rural areas like farmers.

Furthermore, new wind and solar now can cost less than new fossil fuel power plants, even without subsidies. But the more a country’s solar and wind companies can get ahead, the better they fare in quickly transforming global energy economy. First Solar wins large projects around the world due to its innovation in the USA, GE sells wind turbines around the world, and Tesla recently won and completed a massive energy storage in Australia, among other places.

The long-term trend has become more clear and some media outlets have referenced a coming point when coal simply is no longer used. “Solar power, once so costly it only made economic sense in spaceships, is becoming cheap enough that it will push coal and even natural-gas plants out of business faster than previously forecast.”

Why keep giving subsidies to industries that are so mature they’re fading, that don’t offer long-term economic growth for a country through innovation and improvement?

What if the total cost of fossil fuel subsidies over many years was calculated? If the intangible drilling oil & gas deduction has been used for about 100 years, what is the total cost of just that one form of government support?

The US automotive industry relies upon petroleum and it also has received many billions in support from the federal government.

Critics of renewable energy often say electric vehicles should not receive government support, but gas-powered vehicles have been receiving it for many years, just like the oil and coal industries have.

In fact, it seems very hypocritical to dismiss renewable energy and EVs as unable to stand without government support when coal, oil, and gas-powered vehicles all have depended it.

Renewables Are Better than Fossil Fuels

Cost comparisons of fossil fuels and renewable energy seem to assume that both forms of energy are the same and don’t have any extra costs, but clean, renewable energy is actually much better for human health, the environment, and the planet.

There are specific costs renewable energy critics don’t point out because their position would crumble very quickly. One report stated that 52,000 premature deaths are caused in the US each year by power plant emissions (while 53,000 of premature deaths come from road transportation).

So, perhaps the critics of renewable energy can figure out the cost of 52,000 premature deaths in the US every year, and add that amount to the cost of using coal and natural gas.

In China, that figure is much higher. In 2013, the number of premature deaths linked to coal burning was 366,000 — in just one year.

In the EU, the number of premature deaths every year from coal dust was estimated to be 22,900. The estimate for India is about 100,000 premature deaths each year from coal burning. The financial cost was figured to be $4.6 billion each year. The total financial cost of coal in the US to human health and the environment has been estimated at $500 billion a year.

Overall, millions of human deaths are occurring each year from outdoor and indoor air pollution. Fossil fuel use is planted right in the middle of all that air pollution. In other words, it isn’t caused by solar and wind power.

Future Costs

Climate change is happening and it is caused by the burning of fossil fuels. We don’t know the full extent of the damage because it is a global phenomenon that is too complex for us to fully understand at the moment.

How much of Hurricane Harvey’s intensity and scope were related to weather conditions influenced by climate change? Should we try to factor in the $180 billion in damages cost by this one hurricane?

How many more hurricanes will there be at this level that might have been far less damaging without the impact of climate change on weather?

If there are more Class 5 hurricanes due to climate change, we should factor in those costs. It is possible there will be a whole new category — Class 6 hurricanes.

“These potential Category 6 hurricanes may be up to 14 times more likely by 2100, according to the study.” What about the cost of those?

Similarly, the driest year in Texas history was reported to be in part related to climate change. What was the financial cost, and has it been fully tallied? “The total direct cost of agricultural loss was $5.2 billion, with an estimated $3.5 billion in indirect costs, bringing the total loss to $8.7 billion. The direct costs were due to a drop in cotton, wheat, hay, corn, and sorghum production along with livestock losses. The indirect costs were associated with job losses and crop price increase.”

To be fair to clean, renewable energy, one would have to factor in the cost of fossil fuels’ contribution to climate change. However, these calculations typically aren’t being done, so we don’t have a full, accurate account of the true cost of fossil fuel usage.

Of course, some critics of renewable energy won’t admit that climate change is happening, so they would never acknowledge these very real costs. If climate change decimates fisheries and millions of people whose lives depend upon them no longer have a way to make money or get food, what will that cost be?

For the coal industry, what is the cost of the lives of thousands of coal workers who died in accidents or from respiratory illnesses.

Clean, renewable energy does not contribute to climate change and therefore does not make severe weather worse. The use of fossil fuels is causing climate change, and therefore it also is a factor in make harmful weather more damaging.

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