Fossil Fuel Subsidies and Climate Change

At the G20, President Obama said he would phase out fossil fuel subsidies as a way to combat climate change.  Recent reports from the International Energy Agency and other institutions point out the scale of those largely hidden subsidies and how they contribute to global warming.

According to Steve Kretzman of the Institute for Policy Studies, on an annual basis, globally, there are at least $250 billion dollars in global fossil fuel subsides, and some people think that number is closer to $400 billion. Kretzman believes the discontinuation of such subsidies will be quite profound for climate change mitigation.  He points to a study from OECD earlier this year that showed that if the $300 billion dollars in subsidies identified in the study were taken away, you would get a 10% – 12% reduction in global greenhouse gases.

Kretzman says that on the production side, a recent study shows $70 billion dollars going to the fossil fuel industry on an annual basis, while solar, wind, and energy efficiency get about $12 billion. That’s a massive market distortion.

Not surprisingly, politicians from oil-producing states immediately began defending such payouts to the fossil fuel industry as “tax incentives,” not subsidies.  However, upon examining the massive infrastructure required for automobiles running on gas, there can be no denying both the fiscal and environmental cost of a society based on the conventional automobile. Below are some statistics for consideration:

From the 2008 BP Statistical Review of World Energy: Americans consumed 6.5 billion barrels of oil in 2008, or 22.5% of world oil consumption.  China was second with 9.6%.

While some may argue that cleaner cars are coming down the pipe, according to the Umweltund Prognose-Institute in Heidelberg, Germany, a car causes more pollution before it’s ever driven than in its entire lifetime of driving.

According to Runzheimer International, the environmental cost of one car breaks down as follows:

  • Extracting Raw Materials: Produces 26.5 tons of waste and 922 cubic meters of polluted air.
  • Transporting Raw Materials: Causes the release of 12 liters of crude oil in the ocean and 425 million cubic meters of polluted air.
  • Producing the Car: Produces 1.5 tons of waste and 74 million cubic meters of polluted air.
  • Driving the Car: Produces 18.4 kilos of abrasive waste and 1,016 million cubic meters of polluted air.
  • Disposing of the Car: Produces 102 million cubic meters of polluted air.

Paved surfaces present another hidden cost of the car-based system.  Concrete or asphalt in roads and sidewalks create water pollution and require drilling, mining and transporting of gravel, cement and asphalt. Forty single-family dwellings require 40 times as much concrete in roads and sidewalks as a 40-unit apartment building on a single lot. Moreover, water, sewer, electrical, phone, cable and other services lie under the street and branch off into each lot, so sprawl housing uses much more of these materials.  If you consider that on

Consider that 233,333 square yards of roads and sidewalks per household are required when housing density is three households per acre.  However, only 7,000 square yards of roads and sidewalks per household are required when housing density is 100 households per acre.  That’s only 3% of what’s required for the less densely built scenario – a huge difference in needed materials and resulting costs.

When you consider that citizens living in dense urban centers without a car are heavily subsidizing car users through taxes to pay for all of the required infrastructure, it becomes increasingly clear that such a market distortion bloats costs to the taxpayers and is taking a very large toll on the earth’s atmosphere.  Designing and building cities to be dense, pedestrian and bike-friendly locales with the necessary public transport for human mobility would seem the only way to adequately address climate change and the hidden subsidies of car-centric infrastructure.

Several city planning and policy experts will be addressing the issue of urban density in cities at the upcoming EcoCity World Summit in Istanbul this December. Presenters will include Richard Register of EcoCity Builders, Walter Hood (urbanist, landscape architect), Ken Yeang (bioclimatic design), David Hall (New Vista Ecocity), the World Bank Eco2Cities program, Global Footprint Network, Janet Larsen of Earth Policy Institute (representing Lester Brown’s Plan B), and Brent Toderian, head of City Planning for City of Vancouver, Canada and author of the EcoDensity Initiative.

Stacey Meinzen


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