A subsidy is a financial aid, granted by the government, to assist an industry so price of its commodity is artificially lowered.

Fossil fuel subsidies increase sales of gas, oil and coal—sources of the carbon pollution we must lower. Rather than making pollution expensive, subsidies make it cheaper. This is like raising taxes on cigarettes to discourage smoking, while also giving tobacco companies tax breaks so they can make more cigarettes and profits.

To make matters worse, fossil fuel subsidies disadvantage clean energy. They make fossil energy cheaper than renewables. Consequently, investing in renewable energy becomes less attractive. Subsidies distort the market, pushing investment toward sectors that might not otherwise be viable.

When fossil fuel producers receive hundreds of millions of dollars in subsidies each year, vital government resources aren’t available for important sectors, such as renewable energy and social services.

There are three major types of fossil fuel subsidies, royalty reductions, direct subsidies such as grants, loan guarantees and fossil fuel specific tax measures and indirect subsidies such as public infrastructure investments, reduced utility rates, general tax measures and the cost of pollution borne by society.

All of these help........

© Castanet