Shift the Subsidies: Tracking the flow of public money to energy projects around the world

For decades, wealthy countries have been using international aid and other foreign assistance—through grants, loans, equity and loan guarantees—to subsidize the expansion of the international fossil fuel industry.  Many of these institutions provide export insurance as well.

The Shift the Subsidies database is an interactive tool to visually track and analyze the flow of financial support from international, regional and bilateral public financial institutions around the world to the energy sector.

As of December 2011, the database tracked funding from the World Bank Group from fiscal year 2008 to fiscal year 2011 and major regional development banks from fiscal year 2008 to fiscal year 2010. Oil Change International plans to add bilateral aid from major governments in the near future.

Earth Track Note:  While the vast majority of these financial supports are subsidized (sometimes at very high levels), the database tracks gross commitments, not subsidy levels.  Subsidy levels would be the difference between market rates on the credit instruments provided and what the recipients actually paid.  In all but a few situations (early default by the borrower, or activities that are so risky that the cost of capital would be dramatically higher than what is being charged), the subsidy will be less than the gross commitment. 

The financial institutions rarely provide the necessary detail on commitments to allow a more precise subsidy estimate to be calculated.  Further, the patterns of gross commitments provide a clear illustration of selection bias in the types of projects that get funded, a pattern that over time distorts the pattern of investments in many recipient countries.