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Energy Shift

Charted: $5 Trillion in Fossil Fuel Subsidies

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Fossil fuel subsidies

Charted: $5 Trillion in Fossil Fuel Subsidies (2010-2021)

With energy consumption vital for life and business, governments often look to fossil fuel subsidies to make energy as affordable as possible.

These subsidies artificially reduce the price of fossil fuels and generally take two forms:

  • Production subsidies occur when governments provide tax cuts or direct payments that reduce the cost of producing coal, oil, or gas.
  • Consumption subsidies cut fuel prices for the end-user through price controls and other such measures.

Each year, governments around the world pour nearly half a trillion dollars into fossil fuel subsidies. This chart breaks down a decade of fossil fuel consumption subsidies by energy source using data from the International Energy Agency (IEA).

Breaking Down Fossil Fuel Consumption Subsidies

Since 2010, governments have spent over $5 trillion in fossil fuel consumption subsidies. The majority of this sum went towards making oil more affordable, as seen below:

Subsidies by Year (US$)OilElectricityNatural GasCoalTotal
2010$203.0B$143.5B$113.6B$2.7B$462.9B
2011$263.7B$147.2B$100.4B$3.6B$514.0B
2012$304.0B$149.9B$132.2B$3.3B$589.5B
2013$300.0B$132.8B$119.1B$1.7B$553.6B
2014$262.4B$124.1B$104.2B$1.1B$491.9B
2015$147.3B$119.2B$83.6B$1.5B$351.5B
2016$110.2B$132.8B$56.7B$2.2B$301.9B
2017$153.5B$136.2B$65.2B$2.7B$357.6B
2018$195.3B$167.4B$106.0B$3.0B$471.7B
2019$134.2B$124.8B$51.0B$2.2B$312.2B
2020$90.4B$52.5B$36.9B$1.7B$181.5B
Total$2,164.0B$1,430.4B$968.9B$25.7B$4,588.3B

Fossil fuel subsidies fell to a decade low in 2020 as the pandemic hampered fuel consumption and triggered a nosedive in oil prices. However, after two years of straight declines, the IEA estimates that governments around the world spent $440 billion on subsidizing fossil fuel consumption over 2021, representing a 142% rise year-over-year.

Breaking down the subsidies by fuel, oil accounts for 43% or over $2 trillion of all subsidies between 2010 and 2020. Together, oil and electricity generated by fossil fuels received nearly 75% of all subsidies.

Despite growing support for the clean energy transition, the fossil fuel industry reaps the benefits of billions in subsidies annually—but why?

Why Do Governments Subsidize Fossil Fuels?

High energy prices can have rippling effects throughout an economy.

For consumers, heating and transportation become more expensive. And for producers who use energy and oil as inputs, the cost of goods and services goes up.

Often, governments turn to energy subsidies to keep prices down and encourage economic activity. Therefore, there’s a high cost to removing these subsidies, especially in developing countries where large parts of the population might lack access to affordable energy.

But fossil fuel subsidies can also have detrimental effects. By artificially lowering prices, they can encourage overconsumption of carbon-intense fuels, creating negative externalities through adverse environmental and health impacts. According to the International Renewable Energy Agency, these add up to an amount anywhere between $2.6 to $8.1 trillion globally.

Despite these disadvantages, fossil fuels remain an important part of the global energy mix, with continued support from governments. And with energy prices soaring, 2022 could be another year of billions in fossil fuel subsidies.

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Energy Shift

Forecasting U.S. Clean Energy Job Creation by State (2019-2050)

The U.S. will have 5 million new clean energy jobs by 2050. Here we visualize the change in new clean energy jobs by state.

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Clean Energy Jobs creation by State

The Growth of Clean Energy Jobs by State

As the world is slowly moving towards a carbon-free future, job prospects within the renewable energy industry will see a boom in the coming years. Ranging from environmental scientists to renewable energy generation technicians and engineers, clean energy jobs are growing.

Between the shuttering of coal plants and companies making efforts to use renewable sources of energy, the United States on its own could see the creation of 5 million net new jobs within the energy-supply sector, driven by clean energy.

These jobs offer a more sustainable and high-paying alternative for the current and new workforce, especially in some of the country’s highly fossil-fuel-dependent states.

Based on analysis presented by Princeton University, the above infographic visualizes the forecasted change in energy-supply jobs in every state from 2019 to 2030 and up until 2050, in a net-zero scenario.

Shift in Energy Supply Jobs by 2030: Texas on the Forefront

Between 2020 and 2021, jobs in the oil and gas sector saw a 9% decline in Texas, a reduction of more than 55,000 in the state. Despite this, Texas is still one of the largest oil and natural gas producers, employing the highest number of people.

A rapid rise in employment in the clean energy industry will compensate for this decline in fossil fuel sector jobs. Texas fossil fuel unions have also signed onto the climate action plan and vowed to create more jobs in the clean energy sector.

In the process, Texas will see nearly 135,000 net new energy-supply jobs by 2030, more than any other state.

Here’s a look at the number of forecasted net new energy-supply jobs in the rest of the country:

StateForecasted Net Change in Energy-supply Jobs (2019-2030)
Texas134,446
California73,259
Florida65,754
South Carolina55,058
Iowa46,295
Virginia43,250
New Mexico39,548
Indiana38,908
Missouri33,786
Oklahoma30,953
Nebraska30,866
Illinois30,003
New York26,063
North Carolina25,789
Kansas22,064
Colorado18,634
Washington17,272
Alabama12,977
New Jersey12,845
Minnesota12,726
Michigan12,546
Georgia12,375
Oregon11,794
Pennsylvania11,581
Massachusetts11,332
North Dakota10,319
Mississippi9,564
Louisiana7,460
Utah7,388
Idaho6,758
Maryland6,461
Connecticut6,429
Nevada6,358
Montana6,014
Ohio5,873
Kentucky5,106
Maine4,483
Arizona3,962
South Dakota3,904
Tennessee3,752
Wyoming2,458
New Hampshire2,167
Arkansas1,991
Vermont1,591
Delaware1,538
Rhode Island1,399
Wisconsin863
West Virginia-1521
Total U.S.852,651

Note: Negative values indicate a decline in energy-supply jobs by 2030.

Shift in Energy Supply Jobs by 2050: Wisconsin Advances

Wisconsin has stated its desire to transition to 100% clean energy by 2050, growing the state’s economy by more than $21 billion.

According to Princeton, Wisconsin could also introduce more than 46,000 net new energy-supply jobs by 2050, a tremendous leap over the state’s 863 new jobs forecasted through 2030.

StateForecasted Net Change in Energy-supply Jobs (2019-2050)
Texas728,899
California356,350
Iowa266,464
Florida262,254
Nebraska216,561
Oklahoma213,432
Virginia209,840
Colorado183,014
Indiana170,705
Illinois165,348
Minnesota154,014
Oregon139,981
Kansas135,561
Georgia130,015
Pennsylvania127,286
Missouri126,825
Alabama125,812
New York121,786
Washington107,267
Maine102,026
Mississippi92,425
North Dakota86,490
Michigan80,755
New Mexico76,566
Tennessee74,275
North Carolina74,150
South Carolina62,779
Wyoming61,225
Montana60,127
Ohio53,848
Wisconsin46,445
New Hampshire44,025
South Dakota43,916
Arkansas42,038
Maryland39,527
West Virginia32,439
Nevada30,990
Kentucky29,243
Idaho28,371
Utah28,059
Vermont26,293
Arizona14,399
Delaware11,954
New Jersey11,091
Louisiana9,969
Connecticut5,644
Rhode Island1,478
Massachusetts-6,703
Total U.S.5,160,124

Note: Negative values indicate a decline in energy-supply jobs by 2050.

The state of Wyoming has the second-highest change in energy supply jobs, going from 2,400 jobs by 2030 to nearly 62,000 by 2050. Meanwhile, California, Florida, and Texas will continue their commitment to being leaders and introducing more clean energy-supply jobs by 2050.

The only states that will see a decline in clean energy jobs between their 2030 and 2050 totals are the northeastern states of Connecticut, New Jersey, and Massachusetts.

Most states have taken measures to create more sustainable and high-paying jobs without leaving the current workforce in the lurch. On average, U.S. states will see an increase of 105,000 energy-supply jobs by 2050.

As the states and the country make this transition and federal and private investment in the renewable energy industry increases, it’ll be interesting to keep track of how new clean energy jobs impact the economy.

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Energy Shift

What Are the Five Major Types of Renewable Energy?

Renewable energy is the foundation of the ongoing energy transition. What are the key types of renewable energy, and how do they work?

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the five types of renewable energy and how they work
the five types of renewable energy and how they work

The Renewable Energy Age

Awareness around climate change is shaping the future of the global economy in several ways.

Governments are planning how to reduce emissions, investors are scrutinizing companies’ environmental performance, and consumers are becoming conscious of their carbon footprints. But no matter the stakeholder, energy generation and consumption from fossil fuels is one of the biggest contributors to emissions.

Therefore, renewable energy sources have never been more top-of-mind than they are today.

The Five Types of Renewable Energy

Renewable energy technologies harness the power of the sun, wind, and heat from the Earth’s core, and then transforms it into usable forms of energy like heat, electricity, and fuel.

The above infographic uses data from Lazard, Ember, and other sources to outline everything you need to know about the five key types of renewable energy:

Energy Source% of 2021 Global Electricity GenerationAvg. levelized cost of energy per MWh
Hydro 💧 15.3%$64
Wind 🌬 6.6%$38
Solar ☀️ 3.7%$36
Biomass 🌱 2.3%$114
Geothermal ♨️ <1%$75

Editor’s note: We have excluded nuclear from the mix here, because although it is often defined as a sustainable energy source, it is not technically renewable (i.e. there are finite amounts of uranium).

Though often out of the limelight, hydro is the largest renewable electricity source, followed by wind and then solar.

Together, the five main sources combined for roughly 28% of global electricity generation in 2021, with wind and solar collectively breaking the 10% share barrier for the first time.

The levelized cost of energy (LCOE) measures the lifetime costs of a new utility-scale plant divided by total electricity generation. The LCOE of solar and wind is almost one-fifth that of coal ($167/MWh), meaning that new solar and wind plants are now much cheaper to build and operate than new coal plants over a longer time horizon.

With this in mind, here’s a closer look at the five types of renewable energy and how they work.

1. Wind

Wind turbines use large rotor blades, mounted at tall heights on both land and sea, to capture the kinetic energy created by wind.

When wind flows across the blade, the air pressure on one side of the blade decreases, pulling it down with a force described as the lift. The difference in air pressure across the two sides causes the blades to rotate, spinning the rotor.

The rotor is connected to a turbine generator, which spins to convert the wind’s kinetic energy into electricity.

2. Solar (Photovoltaic)

Solar technologies capture light or electromagnetic radiation from the sun and convert it into electricity.

Photovoltaic (PV) solar cells contain a semiconductor wafer, positive on one side and negative on the other, forming an electric field. When light hits the cell, the semiconductor absorbs the sunlight and transfers the energy in the form of electrons. These electrons are captured by the electric field in the form of an electric current.

A solar system’s ability to generate electricity depends on the semiconductor material, along with environmental conditions like heat, dirt, and shade.

3. Geothermal

Geothermal energy originates straight from the Earth’s core—heat from the core boils underground reservoirs of water, known as geothermal resources.

Geothermal plants typically use wells to pump hot water from geothermal resources and convert it into steam for a turbine generator. The extracted water and steam can then be reinjected, making it a renewable energy source.

4. Hydropower

Similar to wind turbines, hydropower plants channel the kinetic energy from flowing water into electricity by using a turbine generator.

Hydro plants are typically situated near bodies of water and use diversion structures like dams to change the flow of water. Power generation depends on the volume and change in elevation or head of the flowing water.

Greater water volumes and higher heads produce more energy and electricity, and vice versa.

5. Biomass

Humans have likely used energy from biomass or bioenergy for heat ever since our ancestors learned how to build fires.

Biomass—organic material like wood, dry leaves, and agricultural waste—is typically burned but considered renewable because it can be regrown or replenished. Burning biomass in a boiler produces high-pressure steam, which rotates a turbine generator to produce electricity.

Biomass is also converted into liquid or gaseous fuels for transportation. However, emissions from biomass vary with the material combusted and are often higher than other clean sources.

When Will Renewable Energy Take Over?

Despite the recent growth of renewables, fossil fuels still dominate the global energy mix.

Most countries are in the early stages of the energy transition, and only a handful get significant portions of their electricity from clean sources. However, the ongoing decade might see even more growth than recent record-breaking years.

The IEA forecasts that, by 2026, global renewable electricity capacity is set to grow by 60% from 2020 levels to over 4,800 gigawatts—equal to the current power output of fossil fuels and nuclear combined. So, regardless of when renewables will take over, it’s clear that the global energy economy will continue changing.

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