Many thanks to Auden Schendler, SVP of Sustainability at the Aspen Skiing Company for the invitation to talk about energy subsidies as part of their Aspen U Speaker Series. The event was also sponsored by the Aspen Center for Environmental Studies, Protect Our Winters, and Audi.
The event gave me a chance to update my Introduction to Energy Subsidies slide deck. The presentation is a useful starting point for people looking for a quick overview of how governments provide subsidies to industry, why these policies are a common feature of nearly every government in the world, how the pattern of support tends to favor more powerful interests, why fossil fuel subsidy estimates differ, and how the subsidies affect returns in the fossil fuels sector.
Introduction to Energy Subsidies Presentation - March 2023
While pricing of carbon emissions continues to grow around the world (nearly one-quarter of fossil fuels now have some price on carbon), these prices are often very low and global subsidies remain more than 8x global carbon revenues.
A similar pattern arises with environmentally harmful subsidies more broadly. The Kunming-Montreal Global Bioversity Framework approved in December of 2022 for the first time sets quantitative targets for reducing global EHS subsidies by $500 billion annually. This is a huge step forward. But even with estimates for EHS that we know are too low, the EHS subsidies exceed the reduction targets by more than a factor of 3x. There is much work to be done.
On a personal note, my first work on energy subsidies benefited greatly from the input, engagement, and encouragement from Rick Heede and Amory Lovins, both then at RMI. It was wonderful to reconnect with the two of them the Aspen U event.
