Bloomberg

There has never been a systematic review of global subsidies to energy that capture all fuels, all countries, and both the consumer and producer sides of the market.  However, a recent article on cybercrime (quite an interesting read) by Michael Riley at Bloomberg allows some interesting comparisons, albeit using partial data, on the massive scale of energy subsidies relative to some other global "industries."

$43,000,000  - Total value of all US bank robberies in 2010 according to the US Federal Bureau of Investigation

$85,000,000,000 - Global market for cocaine per year, according to United Nations data

$114,000,000,000 - Value of data stolen each year, according to security firm Symantec

$409,000,000,000 - 2010 subsidies to fossil fuel consumers as estimated by the International Energy Agency

Okay; the comparison may be somewhat unfair.  The global cocaine market, after all, spurs all sorts of violence and injustice in its wake, while at least some fossil fuel subsidies go to the poor and help keep them afloat.  Point taken -- but only partially. 

The massive scale of energy subsidies in relation to these other activities ought to give us pause.  In terms of misdirection of societal resources, the problem is immense -- all the more so once one remembers how partial the IEA subsidy figure is.  It captures only fossil fuels, not all energy; and focuses only on subsidies to consumers, not to the producer side as well.  And, while some of the fossil fuel subsidies do help the poor, the subsidy analysis in IEA's 2011 World Energy Outlook (the source of the $409 billion subsidy figure), also shows that the vast majority of subsidies flow to wealthier parts of society, not the poorest.  As a result, the energy subsidies have the effect of diverting an enormous pool of fiscal resources away from better policies to create opportunity and alleviate poverty for the poorest segments of society.

The internet has been aflutter with the findings by New Energy Finance that conventional fuels receive way more in subsidies than does renewable energy.  The press coverage generally refers to this short summary. Today it was picked up in Andrew Revkin's influential dot Earth blog.

Turns out that New Energy Finance is really Bloomberg New Energy Finance, a research consultancy owned by Bloomberg.  The actual study itself is nowhere to be seen (my e-mail to the Bloomberg reporter on this issue went unanswered).  It is hard to imagine such widespread coverage of a subsidy study -- released without the actual study -- had it been done by a random research institute rather than one affiliated with a media powerhouse.  While the full report may be available behind NEF's firewall, perhaps to their paying clients, I hope NEF CEO Michael Liebreich will do the right thing and post the report in a place we can easily access and evaluate it.  I'm guessing Andrew Revkin would be happy to post a link.

Some of the findings do seem interesting.  For example, the press release refers to total subsidy estimates for feed-in tariffs within the EU, something I've been looking for for awhile.  However, it is also clear that subsidy tallies need to be done systematically and comprehensively if they are to be valid (see my review of EIA's subsidy estimates for an illustration of how complicated this can be).  NEF does not seem to have reported metrics other than gross dollars (subsidies per unit energy delivered would have been important as well); and may not have picked up all of the relevant programs. There also seem to be valuation errors, as they pick up subsidies to petrol consumers in the developing world (via their inclusion of IEA's $557 billion subsidy estimate) while likely missing the subsidies to producers of biofuels granted via consumption mandates in both the US and Europe.

I've posted some additional comments on the NYT's site, as have Ron Steenblik and Lee Schipper.  We learn as well from commenter James in Northern Nevada that liability caps for nuclear accidents under the U.S. Price Anderson Act is a tax, not a subsidy.  Time requires I defer a take-down of that little nugget of fantasy to another day...