Subsidies to suppliers in the PJM Interconnection go to fossil and nuclear, not just renewables

PJM Interconnection is a regional transmission operator (RTO) serving more than 60 million customers in 13 states and the District of Columbia.  The service region is centered in the mid-Atlantic region of the United States. Incumbent base load generators within PJM have complained that subsidies to renewable resources have been cutting their ability to win capacity market auctions, stripping them of revenue, and harming them competitively. They have been proposing adjustment factors that would improve their competitive position by adjusting bid prices to exclude the subsidy.

OECD's newest fossil fuel subsidy inventory is a big success on many fronts

I'll say right up front that I am not an unbiased observer of this particular effort by OECD to tabulate support measures to fossil fuels.  I've collaborated with Ron Steenblik, one of the project supervisors, for decades at this point; and with project manager Jehan Sauvage since his early days of deciding to enter the bizzarre-but-fascinating world of energy subsidies.  I also contributed directly to the 2013 version of the Inventory.

OECD Companion to the Inventory of Support Measures for Fossil Fuels 2015

The combustion of fossil fuels is a leading contributor to climate change, and many countries have already taken steps to reduce their emissions of CO2 and other pollutants. Some policies remain, however, that encourage more production and use of fossil fuels than would otherwise be the case. In so doing, these policies increase emissions and make mitigation more costly than necessary. Fossilfuel subsidies are one such policy.

Fossil Fuel Subsidies: Approaches and Valuation

Numbers ranging from half a trillion to two trillion dollars have been cited in recent years for global subsidies for fossil fuels. How are these figures calculated and why are they so different? The most commonly used methods for measuring subsidies are the price-gap approach-quantifying the gap between free-market reference prices and the prices charged to consumers-and the inventory approach, which constructs an inventory of government actions benefiting production and consumption of fossil fuels.

Global Energy Subsidies: Scale, Opportunity Costs, and Barriers to Reform

Government subsidies to energy producers, transporters, and consumers are widespread throughout the world and represent a large public investment in the energy sector. In theory, this investment could be funding a variety of social goals such as providing the poor with access to basic energy services and addressing common environmental problems linked to energy extraction and consumption.

Although some subsidies do address these types of concerns, most either do not, or do not do so effectively.

Subsidies to Energy: A Review of Current Estimates and Estimation Challenges

Presentation at a meeting sponsored by the Energy Research Institute of China's National Development and Reform Commission and the World Bank in Beijing, China.  The presentation reviews existing estimates of global subsidies to energy, including their magnitude, differences in estimation methods and assumptions, reporting trends, and emerging issues. 

We are grateful to the World Bank for making a Mandarin version of this presentation available as well.

Global consensus on the logic and need for fossil fuel reform continues to broaden

The Inter-American Development Bank (IDB) is embarking on a major work program to identify and assess fossil  fuel subsidies throughout Latin America and the Carribean.  I had the privilege of presenting a number of ideas on how to leverage their effort during an expert meeting on the topic a few weeks back.  The slides from my presentation can be viewed here.

Growing consensus that fossil fuel subsidies need to go

Fossil Fuel Subsidies: Building a Framework to Support Global Reform

Keynote presentation at the Expert Workshop on Subsidies to Fossil Fuels and Climate Mitigation Policies in Latin America and the Caribbean (LAC), held at the Inter-American Development Bank in Washington, DC on January 14, 2014.  Slides review recent global estimates of fossil fuel subsidies, highlighting both the tallies and the reasons the estimates differ widely from one another. 

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