More than two dozen countries are responding to low oil prices by scaling back or eliminating fossil fuel subsidies designed to keep costs down for consumers, the International Energy Agency reported last week.
Chief Economist Fatih Birol said the IEA no longer expects direct subsidies to fossil fuel producers to reach $660 billion by 2020. That’s good news for greenhouse gas reductions, because “in the absence of subsidies, all of the main renewable energy technologies would be competitive with oil-fired plants,” he said.
Subsidies had already fallen marginally in 2013, to $548 billion. The $26.5 billion decline was the first in four years.
“While lower oil prices may seem like a hindrance to sales of renewables, local and national incentives have generally insulated the clean energy industry from market fluctuations,” Nicola writes. “By reducing fossil fuel subsidies, governments are giving solar and wind power a level playing field on cost at a time when their popularity is growing in response to global warming.” (h/t to InsideClimate News)