Energy futuresSubsidies for fossil fuel dwarf government support for renewable energy

Fossil fuels are the backbone of economies worldwide, so governments spend a lot to support them. A new report from Bloomberg New Energy Finance says altogether governments spent between $43 and $46 billion on renewable energy and biofuels last year, not including indirect support, such as subsidies to corn farmers that help ethanol production. Direct subsidies of fossil fuels came to $557 billion, the report says.

Kevin Bullis writes in Technology Review that this disparity raises this intriguing question: if the report is right and fossil fuels require so much backing, can they compete with renewables without government support? After all, some renewables — such as sugarcane based biofuels and some wind farms — can already compete with fossil fuels. Without the huge government subsidies for fossil fuels, would they not be eclipsed by renewables?

Bullis says that the answer, for now, is no. So far renewables just can not provide enough fuel and power to displace fossil fuels. The infrastructure to make and distribute them is not adequate, and many renewables have shortcomings that can make them difficult to work with — solar panels, for example, only generate electricity when the sun is out. If the fossil fuel subsidies disappear, gasoline and electricity prices will increase. This will help renewables compete, and increase in scale, but it will take years — likely decades — for them to reach levels high enough to replace all fossil fuels.