The World is Spending a Stunning $ 550 Billion per Year on Fossil Fuel Subsidies

Today, the Paris-based International Energy Agency released its 2014 World Energy Outlook, an annual data dump outlining where the world’s energy use patterns are heading in the future. The basic upshot is that planet Earth is definitely moving in a cleaner and greener direction — just not fast enough to save us from dangerous climate change.

First, the good news: In the future the IEA projects that global demand for the dirtiest fuel — coal — won’t grow nearly as quickly as it has in the past. In fact, coal demand will level off, IEA says, thanks largely to environmental policies being adopted around the world (including the US’s own Clean Power Plan).

Overall coal use is expected to plateau and rise only very slowly after 2020. In this scenario, with coal use declining in the U.S., Europe, and China, India is actually expected to surpass the U.S. and become the second largest coal consumer toward the end of this decade.

Meanwhile, the IEA also projects a stunning growth in renewable sources of electricity — wind, solar, and hydropower in particular. By 2040, it expects renewables to power 33 percent of global energy demand, as opposed to the current 21 percent, even as subsidies to strengthen the growth of renewables begin to subside:

The report does note, however, that governments around the world are still subsidizing dirty fossil energy much more than they’re subsidizing renewables. As of 2013, reports IEA, world fossil fuel subsidies totaled $550 billion, four times the amount devoted to clean energy.

Which partly explains why despite an overall greening of world energy patterns in the next 25 years, the IEA says we are going to miss climate goals and end up with quite a lot of warming (barring a very significant course correction). The agency cites “the failure to transform the energy system quickly enough to stem the rise in energy-related CO2 emissions (which grow by one-fifth to 2040) and put the world on a path consistent with a long-term global temperature increase of 2°C.” (It was not immediately clear how much the just announced U.S.-China deal to jointly reduce greenhouse gas emissions changes this picture.)

We have some 1000 gigatonnes of carbon left to emit to the atmosphere before locking in a dangerous amount of warming above 2 degrees, and on the current course we’ll use it all up by 2040, says the IEA. In order to stop that, we’ll need four times the current investment in renewable energy — an increase up to $ 1.5 trillion annually around the world.

The IEA’s conclusion about our carbon budget busting trajectory is highly consistent with that of a 2 page box that was, quite controversially, dropped from the latest “synthesis report” of the United Nations’ Intergovernmental Panel on Climate Change.

The upshot of all this? Here’s one way to think about it: Right now, when it comes to energy the world is kind of like a person who vows to get in shape, goes  out and spends heavily on exercise gear, gym memberships, and personal trainers — but never works out enough, and never cuts back enough on the pizza and french fries.


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