Thursday, July 7, 2016

The Folly of Canadian Fossil Fuel Subsidies

Canadian subsides to the fossil fuel industry amount to $2.7 Billion US ($3.6 billion CDN) a year. Much of these subsidies come from tax breaks. A report from Oil Change International says that $1.6 billion US of those subsidies came come from the federal government with the rest covered by the provinces. As reported by the BBC, Canada spends more on fossil fuel subsidies than any developed nation except the US. To explore exactly where that money goes click here.

In the wake of the Paris Climate Agreement fossil fuel subsidies are coming under even more scrutiny. The pressure is on due in part to Canada's leading role in the Paris climate talks.  However, the COP21 meeting in December was hardly the first time that Canadian fossil fuel subsidies have been questioned. In 2009, Canada along with its member partners in the G7 and the G20 agreed to cut such subsidies, however seven years later we have yet to see any action. It does not look as though this will happen any time soon. In March, Liberal Natural Resources Minister Jim Carr said now is not the time to phase out fossil fuel subsidies. 

The Liberal party was elected on a platform that included cutting these subsidies and reinvesting in "new and clean technologies." However, the new agreement from North American leaders indicates that the national deadline for cutting such subsidies is still 9 years off.

Providing support for a climate destroying industry like fossil fuels makes no sense. Traditionally government support is provided to advance the adoption of fledgling industries, not support mature ones like fossil fuels.

It is madness to provide tax payer money that ultimately increases exploration for more reserves at a time when the world has agreed that we must reign in emissions,  Subsidies increase the global GHG load and this makes those who provide such subsidies complicit in the approaching climate catastrophe.

Eliminating fossil fuels is critical as is supporting the growth of renewable energy. Both would be well served by eradicating subsidies and providing more support to renewables. Currently fossil fuels get four times the subsidies of renewable energy. A 2015 study found that fossil fuel subsidies get four times more support than the Green Climate Fund.

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