Energy Subsidies in Other Countries

The Global Subsidies Initiative—the producers of this newsletter—published a report in September on subsidies to biodiesel in Malaysia, one of a number of country studies that document and analyze government intervention in the biofuel market.

Last month, Oxfam GB launched an emergency appeal for East Africa. Oxfam’s last call for emergency help for the region was in 2006, and there have been countless others before, precipitated by drought, conflict or, like now, both. But this time, something is different. There is food on shelves, but people can’t afford it.

The nuclear power industry in the United States has relied on government intervention and support for over fifty years, raising critical questions. Is this the best use of public funds to promote sustainable energy production?

Heeding complaints by the European biodiesel industry, the European Commission (EC) has launched an inquiry into U.S. biodiesel subsidies which are alleged to have resulted in dumping of U.S. biodiesel into the European market. At the centre of the controversy is a Volumetric Blenders Tax Credit adopted by the U.S. in 2004 which grants a tax credit of US$ 1 per gallon - or over US$ 300 per ton - of biodiesel blended in the United States.

During the 1990s, Malawian farmers experienced a rough transition from government policies that controlled and supported the agricultural sector, such as fertilizer subsidies and price stabilization, to a more liberalized agricultural policy environment.

Indirect public subsidies to political parties in the UK have increased substantially over the last several decades, according to a study by the Policy Exchange think tank. These indirect payments to political parties include free political broadcasts, allowances to member of parliament, and costs associated with special advisors and aids.

State economic development spending in North Carolina is analyzed in a new report by a Washington-based think tank. North Carolina recently released a so-called Economic Development Inventory (EDI), which identifies state spending on economic development. The report, by the Corporation for Enterprise Development (CFED), expands on the EDI's analysis, and suggests how investment incentives could be better spent.

The Energy Information Administration (EIA), a statistical and analytical arm of the U.S. Department of Energy, has released it latest report on subsidies to the energy sector, covering the 2007 fiscal year. Total energy-specific subsidies and support to all energy forms are estimated at US$ 16 billion for 2007: about double the amount estimated in 1999 by the EIA.