These are the supporting slides to a presentation given in May 2019 in the Synapse Energy Economics webinar series. The presentation provides an overview of the scope and magnitude of energy subsidies around the world, and discusses common issues that arise with regards to measurement and value differences across sources.
For many years, policy discussions have focused on strategies to bring down greenhouse gas emissions using taxes, permits and other regulatory or statutory limits. Yet fossil fuel markets across the world remain littered with government programs subsidizing these emissions. The subsidies are large and act as a negative tax on carbon, slowing the transition to cleaner fuels, weakening the impact of carbon constraints and absorbing a significant portion of government revenues in many countries.
In its proposed tariffs to remove potential distortions caused by subsidies in capacity markets, PJM includes a number of limitations and exclusions that appear to result in unequal evaluation of subsidies across different fuel cycles. This will likely impede PJM’s core objective of ensuring competitive, nondiscriminatory auctions in the wholesale capacity market.
This review assesses the House and Senate tax reform proposals as they relate to the energy sector. Three main areas are examined: cross-cutting changes to tax rates or baselines and whether some of them will have disproportionate or distortionary impacts on particular fuels; specific energy tax expenditures that are modified or repealed in the proposals; and baseline subsidies that remain untouched.
Countries in the G20 have committed to phase out ‘inefficient’ fossil fuel subsidies. However, there remains a limited understanding of how subsidy removal would affect fossil fuel investment returns and production, particularly for subsidies to producers. Here, we assess the impact of major federal and state subsidies on US crude oil producers.
Presentation at the NPEC Public Policy Fellowship Retreat in March 2017. The meeting was convened and hosted by the Nonproliferation Policy Education Center. The slides evaluates many of the arguments people make to support increased subsidies to nuclear and finds them wanting.
PJM Interconnection is the regional transmission operator (RTO) serving more than 60 million customers in 13 states and the District of Columbia, mostly in the mid-Atlantic region of the United States. Incumbent base load generators have complained that subsidies to renewable resources have been cutting their ability to win capacity market auctions, stripping them of revenue. They have been proposing adjustment factors that would improve their competitive position by adjusting bid prices to exclude the subsidy.
Within the United States, the cost of energy subsidies to taxpayers is both substantial and often not properly documented. Regular review to evaluate the fiscal costs of these policies; their impact on market structure, competiveness, and environmental quality; and their ability to achieve stated goals is prudent.
My comments focus on three main issues:
This presentation provides an overview of the long history of fossil fuel subsidies in the United States, key milestones in reporting transparency, and remaining data challenges in assessing and quantifying the many pathways that continue to subsidize fossil fuel extraction and consumption today.