U.S. Fossil Fuel Subsidies Exceed Pentagon Spending, says International Monetary Fund Report

Study: U.S. Fossil Fuel Subsidies Exceed Pentagon Spending

The world would be richer and healthier if the full costs of fossil fuels were paid, according to a new report from the International Monetary Fund

By Tim Dickinson | May 8, 2019

The United States has spent more subsidizing fossil fuels in recent years than it has on defense spending, according to a new report from the International Monetary Fund.

The IMF found that direct and indirect subsidies for coal, oil and gas in the U.S. reached $649 billion in 2015. Pentagon spending that same year was $599 billion.

The study defines “subsidy” very broadly, as many economists do. It accounts for the “differences between actual consumer fuel prices and how much consumers would pay if prices fully reflected supply costs plus the taxes needed to reflect environmental costs” and other damage, including premature deaths from air pollution.

These subsidies are largely invisible to the public, and don’t appear in national budgets. But according the the IMF, the world spent $4.7 trillion — or 6.3 percent of global GDP — in 2015 to subsidize fossil fuel use, a figure it estimated rose to $5.2 trillion in 2017. China, which is heavily reliant on coal and has major air-pollution problems, was the largest subsidizer by far, at $1.4 trillion in 2015. But the U.S. ranked second in the world.

The human, environmental and economic toll of these subsidies is shocking to the conscience. The authors found that if fossil fuels had been fairly priced in 2015, global carbon emissions would have been slashed by 28 percent. Deaths from fossil fuel-linked air pollution would have dropped by nearly half.

Oil, gas and coal companies — and their stooges in public office — have long argued that making consumers pay for the full impacts of fossil fuel use would cripple the economy. The IMF experts call bs on this idea, revealing that the world would, in fact, be more prosperous. Eliminating subsidies for fossil fuels would have created global “net economic welfare gains” in 2015 of “more than $1.3 trillion, or 1.7 percent of global GDP,” the study found. (These net gains are “calculated as the benefits from reduced environmental damage and higher revenue minus the losses from consumers facing higher energy prices.”)

For the United States, the $649 billion in fossil fuel subsidies exceeded even the extravagant amount of money the country spent on defense. To offer a sense of scale, Pentagon spending accounted for 54 percent of the discretionary federal budget in 2015. In comparison to another important, but less well-funded part of the federal budget, fossil fuel subsidies were nearly 10 times what Congress spent on education. Broken down to an individual level, fossil fuel subsidies cost every man, woman and child in the United States $2,028 that year.

At the opening of the IMF’s spring meetings in April, Managing Director Christine Lagarde laid out the benefits she sees in properly pricing fossil fuels. “The numbers are quite staggering” she said, referring to the savings that could be achieved “fiscally, but also in terms of human life, if there had been the right price on carbon emission as of 2015.”

Lagarde continued to rattle off the benefits to humanity of realizing these savings. “There would be more public spending available to build hospitals, to build roads, to build schools and to support education and health for the people,” she said.

For Lagarde and the IMF, the conclusion was obvious: “We believe that removing fossil fuel subsidies is the right way to go.”

Link to the article at Rolling Stone here 

Fossil Fuel Industry is in for Dramatic Changes

Did ExxonMobil Lie to Investors About Climate Change?
New York Attorney General Eric Schneiderman is pursuing an investigation—one of many signs that momentum is on the side of climate-justice activists.

By Mark Hertsgaard | The Nation

The dawn of 2016 is not a happy time to be an executive in the fossil-fuel industry. Like Gulliver, who awakens to find his limbs and trunk tied down by the tiny but industrious Lilliputians, the industry is under assault on many fronts at once, and it’s not clear whether it can free itself.

Economically, the prices for oil, coal, and natural gas have been falling, even as production costs remain high. Industry stocks are tumbling, and small and large companies alike are going out of business. Arch Coal, one of the largest coal companies in the United States, declared bankruptcy on January 11. Outside investors are wary or fleeing. Many are embracing solar and wind energy, drawn by plummeting costs that have driven stratospheric growth and market penetration worldwide.

The political terrain is no more favorable. At the United Nations climate summit in Paris last December, virtually every nation on earth promised to all but eliminate the use of fossil fuels after 2050—to abandon oil, gas, and coal in favor of renewable energy. In the United States, one of the nation’s most powerful legal authorities, New York State Attorney General Eric Schneiderman, is investigating whether ExxonMobil, the industry’s alpha leader, committed fraud by lying to investors and the public for decades about climate change. Schneiderman’s investigation and the Paris Agreement in turn exemplify a third threat: an increasingly aroused civil society, spearheaded by a climate-justice movement that continues to grow in size, impact, and global reach.

The fossil-fuel industry remains an immensely rich and politically powerful enterprise, and volatility has been a theme throughout its history. This particular episode may yet prove to be a passing storm. Depressed oil prices can also discourage investment in renewable energy and conservation alternatives. But ExxonMobil, Peabody Energy, and their fossil-fuel brethren at home and abroad appear to be in a fight for their lives. And for the moment, at least, the momentum is against them.

On January 15, US Interior Secretary Sally Jewell announced a three-year moratorium on new coal-mining leases on publicly owned land, as well as a comprehensive review of the “environmental and public health impacts” of coal mining. This ranks as perhaps the strongest climate action the Obama administration has taken to date; publicly owned coal in Wyoming’s Powder River Basin alone accounts for 10 percent of the country’s annual greenhouse-gas emissions.

The world’s other climate-change superpower did much the same, two weeks before Obama did. China will halt new coal-mine approvals for three years and close roughly 1,000 existing mines, the head of its National Energy Administration, Nur Bekri, announced on December 29. Together, China and the United States are responsible for about 60 percent of global coal consumption. Their rejection of coal is fresh evidence that the industry is “a dead man walkin’,” as Kevin Parker, former head of global-asset management at Deutsche Bank, first noted back in 2011.

Momentum begets momentum. Pressure from civil society—from grassroots activists, state and local government leaders, educational and faith institutions, and enlightened business and financial leaders—was essential to reaching the rhetorically ambitious though functionally nonbinding Paris Agreement. Now that accord is giving fresh ammunition to civil society’s efforts to keep most remaining fossil fuels in the ground, as scientists say is required to honor the Paris target of limiting temperature rise to 1.5 to 2 degrees Celsius above the pre-industrial level.

“The Paris Agreement, which has the support of virtually every nation on earth, is a clear and undeniable sign that the fossil-fuel industry is about to experience dramatic changes,” Schneiderman told The Nation. “During this time of rapid transition in the energy economy, it’s crucial that fossil-fuel companies tell the truth to the public and customers about the impacts of climate change on their business.”

Telling the truth is not only crucial; it’s the law. American firms must regularly disclose to investors and the public all material risks that could affect corporate operations and profitability. That will be a challenging if not self-defeating exercise for fossil-fuel companies in the post-Paris era. Telling the truth about Paris only figures to further spook already-nervous investors.

Global Warming - Editorial Cartoons and Grim Reality

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And then there's this...

Bloomberg to discuss preparing NYC for warming world, as projections show growing effects

By Associated Press, Updated: Tuesday, June 11

NEW YORK — The projections paint an unsettling picture of New York’s future: a city where by the 2050s, 800,000 people could be living in a flood zone that would cover a quarter of the land, and there could be as many 90-degree days as is now normal for Birmingham, Ala.

Facing those new projections of the effects of global warming on the nation’s biggest city, Mayor Michael Bloomberg was scheduled to talk Tuesday about what to do about risks that Superstorm Sandy brought into stark relief.

“We have to look ahead and anticipate any and all future threats, not only from hurricanes and other coastal storms but also from droughts, heavy downpours and heat waves — many of which are likely to be longer and more intense in the years to come,” an excerpt from the mayor’s planned speech says.

Read more online at The Washington Post 

Global Carbon Dioxide Emissions From Energy Rose To Record High In 2012, IEA Reports
AP  |  By By KARL RITTER Posted: 06/10/2013