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G20 countries spend $450B a year on fossil fuel subsidies, study says

S'toon

Knows where his towel is
Apr 23, 2015
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G20 countries spend $450B a year on fossil fuel subsidies

G20 countries are spending $452 billion US a year subsidizing their fossil fuel industries and are undermining the world's effort to combat climate change in the process, according to a new international report by an environmental advocacy group.

"It's quite a shocking amount. I think we were surprised the scale of the subsidies is so great," said study co-author Alex Doukas, who is senior campaigner with Oil Change International.

"We're subsidizing companies to search for new fossil fuel reserves at time when we know that three-quarters of the proven reserves have to stay in the ground if we hope to avoid the worst impacts of climate change," said Doukas in an interview from Washington.

"So paying companies to find more fossil fuels is folly."

It's the first time annual subsidies from all G20 countries have been added up and individually analyzed.

<snip>

The report uses government documents and research by independent think-tanks to look at the scale of fossil fuel production subsidies and how much taxpayers' money plays a role.

All G20 countries financially support their petroleum industries to some extent. Subsidies include everything from tax breaks for exploration and purchasing equipment, to royalty breaks and direct spending on projects from government-owned banks and financial institutions.

"The scale of the G20 fossil fuel production subsidies calls into question the commitment of governments to an ambitious deal on climate change," warns the report, pointing out the subsidies are more than three times higher than what the world has spent on renewable energy.

<snip>
Full article at:
http://www.cbc.ca/news/politics/g20-fossil-fuel-subsidies-450b-1.3314291
 

eye.surgeon

Active Member
Nov 18, 2014
1,368
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California
Please. They collect double that back in fuel taxes at the pump. Those subsidies are the best investment the G20 governments are likely to make if it's money you're worried about.
 

S'toon

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Apr 23, 2015
3,702
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Please. They collect double that back in fuel taxes at the pump. Those subsidies are the best investment the G20 governments are likely to make if it's money you're worried about.
These are literally the most profitable companies in the world, and often don't pay any taxes. Why should they receive any subsidies? Especially for things like "developing technology?"
 

eye.surgeon

Active Member
Nov 18, 2014
1,368
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California
ExxonMobil paid $27 billion dollars in taxes last year
Chevron paid $16 billion
ConocoPhillips paid $10 billion

In fact they are among the top 10 taxed corporations in the world. Source is Forbes article, "which mega-corporations are most taxed".
 

Six

Member
Mar 11, 2013
198
7
Please. They collect double that back in fuel taxes at the pump. Those subsidies are the best investment the G20 governments are likely to make if it's money you're worried about.

And the logic being without the $450 Billion in yearly subsidies there would be no fuel at the pumps to collect these fuel taxes from individuals? The large oil companies would stop selling gasoline?
 

eye.surgeon

Active Member
Nov 18, 2014
1,368
2,014
California
And the logic being without the $450 Billion in yearly subsidies there would be no fuel at the pumps to collect these fuel taxes from individuals? The large oil companies would stop selling gasoline?
Would solar companies stop producing if their subsidies disappeared? What about Tesla's subsidies? Would electric cars stop being made without subsidies? Or are you just choosing to look at a industries you don't like.
 

Ryan MF

Member
Jun 24, 2015
161
143
New Jersey
Would solar companies stop producing if their subsidies disappeared? What about Tesla's subsidies? Would electric cars stop being made without subsidies? Or are you just choosing to look at a industries you don't like.

Yeah, that's the point right? We want to encourage the industries that will help humankind survive the next 1000 years and discourage the others.
 

Evbwcaer

Member
Jun 21, 2014
744
327
Minnesota
Yeah, that's the point right? We want to encourage the industries that will help humankind survive the next 1000 years and discourage the others.

You do not even need to make that point, albeit valid. If a person is against subsidies, then fine, get rid of ALL subsidies and let the market work as Adam Smith intended. The bottom line is EV are cheaper to own, in a vast majority of cases, than an ICE. The difference is who pays the costs. With an EV, to a large extent, the owner pays the costs. With an ICE, to a large extent, the owner does not pay the costs. Other humans do by way of health damage, environmental damage, climate damage, political/military, and so on, pay the costs.

It is only in a breakdown of the market, fossil fuels allowing a person to not pay the costs associated with their actions, that ICEs seem cheaper in proactively short-sighted analysis.
 

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
10,620
7,795
Maine
Would solar companies stop producing if their subsidies disappeared? What about Tesla's subsidies? Would electric cars stop being made without subsidies? Or are you just choosing to look at a industries you don't like.

Yes, yes, yes. No.

A significant part of the competitive disadvantage is due to negative externalities that allow competitors to be cheaper than they should be. But even then, subsidies can be necessary for desirable technologies to help them get past the Catch 22 of economies of scale.

Countries around the world are trying to ditch fossil fuel subsidies, because like most cross-subsidies they're counterproductive: not only do they rob Peter to pay Paul, they encourage inefficiency.
 

Ktowntslafan

Member
Nov 3, 2014
715
17
Canada
Despite a shift towards greener energy, the world also still runs on oil. As it stands, two-thirds of every barrel of oil produced is used in transportation. Climate change and low oil prices may have the sector on the ropes, but until the world figures out a better way to move around the industry won't be close to hitting the canvas.



[FONT=Arial, sans-serif]http://www.cbc.ca/news/business/oil...s-low-carbon-world-paul-haavardsrud-1.3310881[/FONT]
 

mknox

Well-Known Member
Aug 7, 2012
10,103
1,868
Toronto, ON
I read that and wondered just how much of the $450B subsidies are just the same run-of-the-mill tax breaks that any corporation would be able to take advantage off. In other words, how much of the $450B is "above and beyond" the normal stuff and specific to the fossil fuel industry? That wasn't clear to me.
 

S'toon

Knows where his towel is
Apr 23, 2015
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The world’s 20 top economies spend more than $400 billion dollars each year propping up fossil fuel production, a practice that threatens to seriously undermine the world’s mitigation of climate change, according to a new report by the environmental advocacy group Oil Change International.


Despite pledging to end fossil fuel subsidies in 2009, G20 countries spent a combined average of $452 billion on fossil fuels in 2013 and 2014, through a mix of direct spending, tax breaks, investments by majority-state owned companies, and public finance from government-owned banks and financial institutions. According to the report, that’s more than four times the amount given to renewables in 2013.


“I think it’s gross hypocrisy for countries to be handing out billions to fossil fuel companies at the same time they are pledging to reduce emissions,” Alex Doukas, senior campaigner with Oil Change International and co-author of the study, told ThinkProgress. “We can’t tackle the climate change problem if we are propping up the production of fossil fuels.”

Since 2009, G20 countries have reaffirmed their promise to cut fossil fuel each year — but in most cases there has been little progress, with some countries actually increasing their fossil fuel subsidies over the past six years. The United States, for instance, has increased its fossil fuel subsidies 35 percent since 2009, which has mirrored an increase in domestic fossil fuel production as part of the Obama administration’s “all of the above” energy policy. The Obama administration has attempted to reign in fossil fuel subsidies by proposing cuts in every budget that the administration has sent to Congress, but that strategy has been met with opposition from lawmakers.


“Some credit should go to the Obama administration for trying to send budgets to Congress that would eliminate or reform fossil fuel subsidies, but it hasn’t resulted in much,” Doukas said.


Annually, the United States government gives out $20.5 billion to support the production of oil, coal, and gas, with $17.2 billion of that coming at the federal level and $3.3 billion coming at the state level.

A large percentage of the subsidies that fossil fuel companies receive in the United States comes in the form of tax breaks. Oil companies, for instance, are able to claim costs associated with cleaning up after an oil spill as a standard business expense. That means that of the when the U.S. attorney general fined BP with a $20.8 billion dollar settlement in October for its role in the Deepwater Horizon disaster, BP can legally claim a large portion of that settlement as a tax deductible business expense — only $5.5 billion of the fine cannot be classified as such.

<snip>

Full article at:
http://thinkprogress.org/climate/2015/11/12/3721677/g20-fossil-fuel-subsidies/
 

S'toon

Knows where his towel is
Apr 23, 2015
3,702
3,644
AB
ExxonMobil paid $27 billion dollars in taxes last year
Chevron paid $16 billion
ConocoPhillips paid $10 billion

In fact they are among the top 10 taxed corporations in the world. Source is Forbes article, "which mega-corporations are most taxed".
Between 2008 and 2010, a dozen major US corporations—including General Electric, ExxonMobil, and Verizon—paid a negative tax rate, despite collectively recording $171 billion in pretax US profits, according to an analysis by Citizens for Tax Justice. Taken together, these companies' tax burden was -$2.5 billion, and ten of the companies recorded at least one no-tax year between 2008 and 2010. Here's more from CTJ:
Not a single one of the companies paid anything close to the 35 percent statutory tax rate. In fact, the "highest tax" company on our list, Exxon Mobil, paid an effective three-year tax rate of only 14.2 percent. That’s 60 percent below the 35 percent rate that companies are supposed to pay. And over the past two years, Exxon Mobil’s net tax on its $9.9 billion in U.S. pretax profits was a minuscule $39 million, an effective tax rate of only 0.4 percent.
Had these 12 companies paid the full 35 percent corporate tax, their federal income taxes over the three years would have totaled $59.9 billion. Instead, they enjoyed so many tax subsidies that they paid $62.4 billion less than that.
If just these 12 companies had paid at a 35 percent tax rate over the past three years, total federal revenues from corporate taxes would have been 12 percent higher than they actually were.

ctj_tax_chart-jpg.preview.jpg

Full article at:
http://www.motherjones.com/mojo/2011/06/ge-exxon-10-other-major-corporations-paid-negative-tax-rate

So yes, they sometimes pay NO taxes, and sometimes have a negative tax rate, meaning that they receive money back from the government.


To the mods, this thread can be merged with the one in the News section.
 

mknox

Well-Known Member
Aug 7, 2012
10,103
1,868
Toronto, ON
So re-reading what @S'toon posted, I think the $450B number is a bit over-stated. They include "investments by state-owned companies"? Well what owner wouldn't invest in their own business? Why single out investments only by "certain" shareholders and then call that a "subsidy"? And I'll bet the "tax breaks" are no different than the "tax breaks" any other company would get, so calling it a "subsidy" sounds a bit disingenuous to me. I'm interested in the number that represents the actual, honest amount of money that these companies are given solely because they are in the fossil fuel business and that other businesses would not be eligible to receive. I'm not suggesting it's zero, but I'll bet it ain't $450B.
 

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