Normally, when you think of an energy subsidy, specifically a fuel subsidy, it’s all good news. With the ever increasing price of fuel, and the world’s economy going to hell in a handbasket, any help we can get is a good thing.

But a new report from the UN Environment Program (UNEP) has turned that idea on its head, and for good measure. Because once you get right down to it, would you rather the government put their moneys in to helping out sustainable and renewable energies, or propping up the old ones?

Subsequently, the UNEP has recommended that fossil fuel subsidies should be scrapped, and that in doing so could not only decrease the amount of greenhouse gases, but also give a “not insignificant boost to the global economy.”



One of the main points of the report was that the subsidies that are in place, while intended to help the poor, never end up helping those intended. These subsidies, more often than not used to artificially lower the real price of fuels like oil, coal and gas, or electricity generated from such fuels, end up helping the middle classes, rather than those beneath.

Additionally, propping up fossil fuel powered systems such as those listed above, do more things that negatively affect the populous. First off, it deprives the government of money out of its environmental budget that could go towards helping the development of renewable energy sources, or subsidizing those greener fuels.

Secondly, and more importantly, these subsidies do further damage to the environment, and our future within it. Such subsidies end up allowing more and more of the fossil fuels to be used, and this increases and perpetuates the greenhouse gas emissions so many of us are trying to eliminate. Additionally, from a sustainability standpoint, decreasing the prices increases the usage, and thus decreases the resources, subsequently decreasing how long we’ll be able to rely on these fuels.

The report does make sure to remember those subsidies that do help the proliferation of renewable energies and raise such awareness. The authors of the report encourage governments to transplant subsidies that support fossil fuels to support cleaner energies and fuels.

"In the final analysis many fossil fuel subsidies are introduced for political reasons but are simply propping up and perpetuating inefficiencies in the global economy – they are thus part of the market failure that is climate change," said Achim Steiner, UN Under-Secretary General and UNEP Executive Director.

"There are now less than 500 days before the crucial climate change convention meeting in Copenhagen in late 2009. Governments should urgently review their energy subsidies and begin phasing out the harmful ones that contribute to the wasteful use of finite resources and delay the introduction of renewables or more efficient forms of generation while creating disincentives and barriers to public transport up to energy saving appliances."

The full report, entitled Reforming Energy Subsidies: Opportunities to Contribute to the Climate Change Agenda, (PDF) was released last week at a meeting in Accra, Ghana of the UN Framework Convention on Climate Change (UNFCCC).

credit: Foto43 at Flickr under a Creative Commons license

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