Republican presidential candidate Jeb Bush said this week that he wants to end tax breaks and other subsidies for all forms of energy, including fossil fuels such as coal, oil and natural gas, as well as renewables like wind and solar.
If he were to be elected president and follow through on this, it could potentially transform the energy landscape. However, he'd face an army of lobbyists from the world's most powerful companies -- such as ExxonMobil and Shell -- standing in the way of subsidy reform, as well as vocal objections from the growing renewable energy sector.
But a group of scientists are going even further on the idea of ending these subsidies. They say the move could finance universal access to water, electricity and telecommunications services (i.e. the Internet) around the world. It's probably not at all what Bush is thinking, but perhaps it should be.
The U.S. and other countries subsidize energy to a staggering degree, particularly fossil fuels such as oil, coal and natural gas. Global fossil fuel subsidies totaled about $550 billion in 2011, with oil subsidies alone counting for at least $400 billion of that total, according to the scientists' new commentary piece published Friday in the journal Nature Climate Change.
Instead of pouring that money into those subsidies, the scientists suggest it should go toward promoting infrastructure needs that would meet the world's Millennium Development Goals.
Specifically, an investment of $190 billion could achieve universal access to water for everyone on the planet, and $370 billion could cover universal access to sanitation. In addition, $430 billion could finance access to electricity, the paper states. All of these expenditures would be possible if financed through the phase out of subsidies over a period of 15 years, through the year 2030.
"These amounts are only a small fraction of the $8.2 trillion in fossil fuel subsidies that would be allotted globally over this period, assuming the allocation remains at 2011 level," according to the authors, who are scientists at the Mercator Research Institute on Global Commons and Climate Change in Germany.
"However, more ambitious projects, such as providing universal access to telecommunication (requiring $2.6 trillion) or paving all unpaved roads ($8.7 trillion) could take up a large share of (or even exceed) the amount of finance that can be levied by fossil fuel subsidy reform," they say.
Calls to end energy subsidies may be doomed politically because they are not as appealing as calls to redirect such funds for social good purposes, the paper points out.
The authors analyzed subsidies and infrastructure needs in individual countries to make their case even more compelling. For example, in Nigeria, about 60% of the people have access to water. Diverting just 4% of the $7.3 billion in annual fossil fuel subsidies in that country would take care of that water access gap.
"According to our estimates, investing a share of between 2% (Indonesia) and 18% (India) over a 15-year period would be sufficient to achieve universal access to sanitation in these countries. Likewise, almost 370 million people lack access to electricity in India, which could be provided by investments of less than 6% of this country’s fossil fuel subsidies," the authors write.
The authors say Pakistan could provide universal access to telecommunications by redirecting their fossil fuel subsidies. India, however, has greater needs for investment than could be provided just by subsidy reform alone.
"There is a nexus of countries with high fossil fuel subsidies and large access gaps," the authors write.
Closing access gaps around the world would help get over the political roadblocks to ending fossil fuel subsidies. "[...] Linking fossil fuel subsidy reform to access considerations could turn out to be beneficial for development as well as the environment, and might even provide a viable basis for more ambitious climate change mitigation policies in the future," the authors write.