Fossil fuel and LNG subsidies in B.C., and an alternate viewpoint on the issue

The International Institute for Sustainable Development (IISD) maintains an ongoing initiative, the Global Subsidies Initiative , to research fossil fuel subsidies worldwide.  Their most recent publication relating to Canada is  Locked In and Losing Out: British Columbia’s fossil fuel subsidies. The authors calculate that BC’s fossil fuel subsidies reached  $830 million Cdn.  in 2017–2018, with no end in sight. Despite B.C.’s clean energy image, the report documents the significant new support granted by the current B.C. government to encourage the liquefied natural gas (LNG) industry.  Locked In and Losing Out calls for the provincial government to create a plan to phase-out its own subsidies, and coordinate with the federal government in its current  G20 Peer Review of fossil fuel subsidies, launched in 2019 and administered by Environment and Climate Change Canada.   In August 2019, the IISD also released its Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies calling for Canada to re-affirm its long-standing  G7 commitment to reform fossil fuel subsidies by 2025 and provide a detailed action plan to achieve the goal.  

new labor forumAn alternate view

Sean Sweeney of Trade Unions for Energy Democracy takes an alternate view on fossil fuel subsidies in “Weaponizing the numbers: The Hidden Agenda Behind Fossil-Fuel Subsidy Reform” appearing in the January 2020 issue of  New Labor Forum. As might be expected, Sweeney challenges the findings and assumptions of the International Monetary Fund (for example, in a 2019 working paper by David Coady ). He also takes issue with some progressive analysis – notably, he cites  Fossil Fuel to Clean Energy Subsidy Swaps: How to Pay for an Energy Revolution (2019) and Zombie Energy: Climate benefits of ending subsidies to fossil fuel production (2017)  – both published by the International Institute for Sustainable Development (IISD).  After a brief discussion of the main concepts, Sweeney concludes:

“For activists in the North, making fossil-fuel subsidies a key political target is a mistake. It buys into the IMF’s obsession with “getting energy prices right” which targets state ownership and regulation of prices. Such an approach may lead to a more judicious use of energy, but it would not address the mammoth challenges involved in transitioning away from fossil fuels, controlling and reducing unnecessary economic activity, or reducing emissions is expeditiously as possible.

The problem is fossil fuel dependency, not underpriced energy. Raising the price without alternative forms of low-carbon energy available for all will not produce the kind of emissions reductions the world needs. This does not mean that progressive unions and the left should support subsidies for fossil fuels—especially when the beneficiaries are large for-profit industrial users or billionaire Lamborghini owners cruising the strips in Riyadh or Shanghai. But there is a need to be aware of what the IMF and the subsidy reform organizations are proposing, and what these proposals might mean for workers and ordinary people, especially in the Global South.”

 

 

 

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