A respected international agency is making a dire call: Cut the graft given to the the fossil fuel sector or feel worst possible effects of climate change. That warning, though, is contested by others who say that renewables get a greater cut of people’s money if measured by total energy production.

The International Energy Agency says that the hundreds of billions is handed to oil, gas and coal -- money that could otherwise go into the green movement. Those are global subsidies that must gradually wane if the goals of the United Nations are to be met -- keeping temperature rises over time to no more than 2 degrees Celsius as well as cutting carbon emissions by 80 percent by mid century.

“The growth of fossil fuels has matched — or even outpaced — that of clean energy globally,” Nobuo Tanaka, executive director of the agency, in a report. “More aggressive clean energy policies are required, including the removal of fossil fuel subsidies and implementation of transparent, predictable and adaptive incentives for cleaner, more efficient energy options.”

The energy agency says that while carbon emissions fell during the recent recession, they are now on their way back up. Last year, they were at record highs. Much of that is coming from the developing world, which is trying to elevate its living standards and which is a voracious consumer of coal.

The agency head adds that while richer nations are curtailing their coal use and preferring instead to generate other, less polluting sources, the developing countries of China and India are increasingly relying on it. In fact, coal now meets 47 percent of the new electricity demand around the world. To cope, nations must accelerate their policy and funding support for large-scale carbon capture and sequestration projects by getting 100 of them up and going by 2020, he says. 

Reaching those objectives, however, may be elusive. While the European Union’s 27 governments have established a 20 percent renewable portfolio standard by 2020, other nations are hesitant. Case in point: The United States has declined to sign any global climate pact that requires firm commitments to cut carbon emissions. That, in turn, has caused Canada, Japan and Russia to think twice. Even some in the EU are hemming and hawing.

Weighing Options

It’s all in the context of the next round of global climate talks that are set for Durban, South Africa in December. The Kyoto Protocol, which required participants to cut their carbon releases 5 percent from 1990 levels by 2012, is set to expire next year.  No “mandated” reductions in greenhouse gas emissions are expected. But optimists say that the negotiations can still lay the foundation for advances that would eventually lead to a concrete agreement.

A recent study by Bloomberg New Energy Finance says that the subsidies given to oil, coal and other fossil fuels are dwarfing those paid to green energies. The firm says that fossil fuels received $557 billion compared to $46 billion for renewables.

It goes on to say that the United States subsidizes clean energy the most with $18 billion spent in 2009. Forty percent of that money, though, went to the bio-fuels sector that includes ethanol, which has become a controversial and contentious subject within both political parties. The rest went to green energy. As for the EU, it provided green subsidies in 2009 totaling $19.5 billion.

“One of the reasons the clean energy sector is starved of funding is because mainstream investors worry that renewable energy only works with direct government support,” says Michael Liebreich, chief executive of Bloomberg New Energy Finance. “Setting aside the fact that in many cases clean energy competes on its own merits ... this analysis shows that the global direct subsidy for fossil fuels is around ten times the subsidy for renewables.”

Green energy advocates have pounced on the revelations. But the research does not tell the full story. In this country, the Congressional Research Service has performed studies showing that in 2009 fossil fuels comprised 78 percent of energy production and got about 13 percent of the federal tax support. Renewables accounted for 10 percent of energy production and received 77 percent of the federal assistance.

The world, of course, needs more energy to feed growing economies. Coal and natural gas are abundant, cheap and reliable. But policymakers will have to balance  those factors with their desire to reduce the level of heat-trapping emissions. While the International Energy Agency says that cutting subsidies to fossil fuels and giving more of them to green energy is the best way forward, the powerful fossil fuel lobbies -- for better or worse -- are unlikely to allow that to occur.

EnergyBiz Insider has been been nominated in 2010 and 2011 for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.

Follow Ken on  www.twitter.com/ken_silverstein

energybizinsider@energycentral.com

Copyright © 1996-2011 by CyberTech, Inc. All rights reserved.

To subscribe or visit go to:  http://www.energycentral.com

To subscribe or visit go to:  http://www.energybiz.com