Two important publications on fossil fuel subsidies were released last week, though covering quite different aspects of the problem. The first, by Oil Change International in Washington, DC, updated information on US subsidies to fossil fuels to 2013. Their work captures the subsidy escalation that has occurred following surging domestic production of oil and gas in recent years. The second, produced for the Global Subsidies Initiative in Geneva and WWF Russia, provides two case studies of Russian gas projects in the Arctic Circle. This is an environmentally sensitive region of the worl
In the movie Field of Dreams, actor Kevin Costner hears a voice in his head telling him "If you build it, he will come." The "it" is a baseball diamond in the middle of his corn field; the "he" is his dead father. Onlookers, of course, think he is crazy, which perhaps he is. But at least in the movie the costs to build and maintain the diamond were not paid by the government. If the idea was a bust, it was Costner's character, not taxpayers, footing the bill. And the environmental impacts? Immaterial.
For years, the International Energy Agency has been measuring subsidies to consumers by looking at the gap between world reference prices for a particular form of energy and what that energy sells for in a country's domestic market. The lower the cost to consumers relative to its world value, the higher the subsidy. Russia has always been among the top of this list: in the IEA's 2010 update, Russia came in third with just under $40 billion in consumer subsidies.