Fossil Fuel Subsidies: The Politics and Economics of Climate Change
Obama at the G-20 Summit. (image: dailyadvance.com)
When President Barack Obama spoke in front of the United Nations global warming summit and promised to “work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge,” his proposal was alternately applauded and condemned. “It’s a great idea,” said Frank O’Donnell, the president of Clean Air Watch. “Wrong-headed,” said Jack Gerard, president of the American Petroleum Institute.
Observers of the politics of climate change are not surprised by such starkly opposed points of view. The confluence of the UN Summit on Climate Change (September 22), the G-20 Pittsburgh Summit (September 24–25), and the United Nations Climate Change Conference in Copenhagen (December 7–18) has made late 2009 a pivotal moment for the international community to shape environmental and energy policy, and both environmental groups and the fossil fuel industry have been preparing for it.
Global actors like the Organization for Economic Cooperation and Development (OECD), the United Nations Environment Program (UNEP), and the International Energy Agency (IEA) have all chosen to weigh in on climate change at this moment. It all builds to the Copenhagen conference in December, which now appears to be the precursor to an informal agreement on emissions reductions goals rather than a legally binding treaty.
While no mainstream voices bother to deny the powerful effect that greenhouse gas emissions have on climate change, the policy debates over the best means of reducing greenhouse gas are vigorous. Cap and trade has garnered the most attention out of the policy tools aimed at combating emissions, especially in the United States since the Waxman-Markey bill passed the House in June and the Senate debates its own cap and trade proposal. But the biggest incentive for emitters may not be the absence of a limit—it may be that the government subsidizes those emissions.
