Quantcast

Why Renewable Energy Subsidies Are the Most Transparent Kind

Business

From direct government support to tax breaks and the cost of negative externalities like pollution, subsidies to the power sector take many different—and often hidden—forms. In fact, the exact definition of a subsidy was the crux of an at times heated debate, “subsidies to the power sector: Europe’s best kept secret?” hosted by the European Wind Energy Association (EWEA) in Brussels, with over 100 attendees.

Subsidies to renewable energy are the most transparent and visible in the energy sector, they are directly in an EU member state’s budget, explained Tom Howes, from the European Commission’s Directorates-General for Energy. “Being so transparent they are the first to attract the eye so there is an unfair treatment in their visibility,” Howes told the audience April 29.

Ronald Steenblik from the Organization for Economic Co-operation and Development (OECD) said that subsidies are extremely difficult to measure. “Is government inaction a subsidy?” he questioned, adding that the OECD does not include inaction such as the failure to tax externalities like pollution in its definition.

For Thomas Becker, CEO of EWEA, “a subsidy is always an act of political will. There’s nothing wrong with them, but transparency is key,” he said. Meanwhile, Brian Ricketts, Secretary General of EURACOAL said “obligations on consumers to purchase an amount of green energy sound like a subsidy to me.”

Howes said that the European Commission has just launched a study which will investigate direct and indirect subsidies and the cost of externalities in the power sector—which should be finished in six months. “It’s a pretty good secret what subsidies are,” he said, adding that the Commission has encountered difficulties in obtaining figures. “There are many different reasons why different groups are unwilling to reveal costs and subsidies. We couldn’t get some fuel price data on imports, it’s labeled as confidential,” he said adding that data on exemptions is also patchy.

Meanwhile, “nobody could find anything on nuclear,” Howes said.

“Many people do not have an interest in exposing figures,” Becker added.

“There’s a whole lot of other market failures to bring to the table. It’s very messy. We need data and to explain the relationships,” Howes said.

For Beate Raabe, secretary general of Eurogas, there aren’t any direct subsidies to the gas sector in Europe and one of the solutions to the problem of including pollution externalities in the power market lies in the Emissions Trading System (ETS)—the EU mechanism for putting a price on carbon emissions. However, “the ETS is not working very well at the moment, we need to make that work. We need to define these externalities and be very transparent about it,” Raabe said.

Ricketts called for market-based solutions. “Renewables have disrupted the market—a consequence of having subsidies—we need a level playing field,” he said. Becker countered with: “It’s a question of pricing our behavior. Do you think coal should pick up the bill for the health and pollution costs of its production?”

“Coal should not have to pick up the pollution bill because the sector we depend on will crumble,” Ricketts said citing consumer’s willingness to buy cheap goods from China, a coal-based economy.

The well-attended debate threw up many pertinent questions—what exactly is a subsidy? How do we count the cost of indirect subsidies like pollution costs? Do subsidies distort the market and can we fix everything with the Emissions Trading System? And, for wind power, when can it stand on its own two feet without subsidies?

“The fossil fuel industry is trying to frame renewables as an industry that can only survive with subsidies. Yet, fossil fuels historically and currently have many more subsidies. Wind can be without subsidies when all other industries do not get subsidies,” Becker said.

Speakers agreed that the Commission’s forthcoming study should shed more light onto the subsidy debate.

“Hopefully this time we will have a better set of data and a better story to tell,” Howes said.

Photo credit: European Wind Energy Association

——–

YOU ALSO MIGHT LIKE

Wind Subsidy Cuts Could Thwart Germany’s Renewable Energy Revolution

Why There Is No Better Time For Wind and Solar Energy Than Now

——–

EcoWatch Daily Newsletter

A verdant and productive urban garden in Havana. Susanne Bollinger / Wikimedia Commons

By Paul Brown

When countries run short of food, they need to find solutions fast, and one answer can be urban farming.

Read More Show Less
Trevor Noah appears on set during a taping of "The Daily Show with Trevor Noah" in New York on Nov. 26, 2018. The Daily Show With Trevor Noah / YouTube screenshot

By Lakshmi Magon

This year, three studies showed that humor is useful for engaging the public about climate change. The studies, published in The Journal of Science Communication, Comedy Studies and Science Communication, added to the growing wave of scientists, entertainers and politicians who agree.

Read More Show Less
Sponsored
rhodesj / Flickr / CC BY 2.0

Cities around the country are considering following the lead of Berkeley, California, which became the first city to ban the installation of natural gas lines in new homes this summer.

Read More Show Less
Rebecca Burgess came up with the idea of a fibersheds project to develop an eco-friendly, locally sourced wardrobe. Nicolás Boullosa / CC BY 2.0

By Tara Lohan

If I were to open my refrigerator, the origins of most of the food wouldn't be too much of a mystery — the milk, cheese and produce all come from relatively nearby farms. I can tell from the labels on other packaged goods if they're fair trade, non-GMO or organic.

Read More Show Less
A television crew reports on Hurricane Dorian while waves crash against the Banana River sea wall. Paul Hennessy / SOPA Images / LightRocket / Getty Images

By Mark Hertsgaard and Kyle Pope

Some good news, for a change, about climate change: When hundreds of newsrooms focus their attention on the climate crisis, all at the same time, the public conversation about the problem gets better: more prominent, more informative, more urgent.

Read More Show Less
Sponsored
U.S. Senators Chris Coons (D-Del.) and Mike Braun (R-Ind.) met with Bill Gates on Nov. 7 to discuss climate change and ways to address the challenge. Senator Chris Coons

The U.S. Senate's bipartisan climate caucus started with just two members, a Republican from Indiana and a Democrat from Delaware. Now it's up to eight members after two Democrats, one Independent and three more Republicans joined the caucus last week, as The Hill reported.

Read More Show Less
EPA scientists survey aquatic life in Newport, Oregon. U.S. Environmental Protection Agency

The U.S. Environmental Protection Agency (EPA) is proposing to significantly limit the use of science in agency rulemaking around public health, the The New York Times reports.

Read More Show Less
A timelapse video shows synthetic material and baby fish collected from a plankton sample from a surface slick taken off Hawaii's coast. Honolulu Star-Advertiser / YouTube screenshot

A team of researchers led by the National Oceanic and Atmospheric Administration didn't intend to study plastic pollution when they towed a tiny mesh net through the waters off Hawaii's West Coast. Instead, they wanted to learn more about the habits of larval fish.

Read More Show Less