Energy Subsidies - International

The United States House of Representative narrowly passed legislation last month that would increase incentives for renewable energy production, while removing tax breaks for the so-called ‘Big Five’ oil companies, as well as firms controlled by foreign governments such as Citgo (Venezuela).

A study released by the Rand Corporation, a nonprofit think-tank, argues that it would be better for the United States to meet a 25% renewable energy standard by adopting a tax on fossil-fuels rather than providing subsidies for renewable energies. The study, “Impacts on U.S. Energy Expenditures and Greenhouse-Gas Emissions of Increasing Renewable-Energy Use”, compared a tax on fossil fuels, subsidies for renewable energies, and a revenue-neutral tax-and-subsidy mechanism.

On World Malaria Day (25 April), the United Nations Secretary General posited a vision of halting malaria deaths by ensuring that effective control measures be available to everyone by the end of 2010. The interventions are, broadly, prevention with long-lasting insecticidal bed nets; spraying interior walls of dwellings with insecticides; and treatment with effective drugs.

The appearance of GSI's recent survey of how OECD economies are pouring billions into subsidising biofuels provides a good time to take stock of the GSI project.   Ours is not an ideological crusade against subsidies. Subsidies are a perfectly legitimate policy tool. Spending public money to advance private ends can sometimes make sense. But those who claim that have to provide hard evidence.

United States farm subsidy programs are again proving to be a major obstacle to expanding international trade opportunities at Geneva meetings aimed at reviving the Doha round of trade negotiations. Opponents of farm subsidy reform may be applauding this impasse, but there is be no reason for glee from the public at large. U.S. farm subsidy programs are broken and need to be fixed.

Fuel subsidies and sustainable development: further resources.