Shift Fossil Fuel Subsidies to Support Green Energy, IEA Urges


With demand for fossil fuels outpacing the growth of renewable energy technologies worldwide, the International Energy Agency suggests that fossil fuel subsidies worth $312 billion be realigned to develop cleaner alternatives.

Although renewable energy has seen growth of 30 to 40 percent in recent years, 47 percent of new electricity demand worldwide over the last decade was met with coal-fired energy, according to agency’s first clean energy progress report.

As of 2009, fossil fuels had received more than $312 billion in subsidies, compared with $57 billion for renewable energy. In some countries, aggressive policies have yielded progress in the deployment of renewable energy sources, according to the study.

For example, at least 10 nations now have sizeable domestic markets for solar technology compared with just three a decade ago. But increased growth depends on increased incentives for private sector investment and market mechanisms, the report says. “We must see more ambitious, effective policies that respond to market signals while providing long-term, predictable support,” said Richard Jones, IEA deputy executive director.

Article appearing courtesy Yale Environment 360.

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Yale Environment 360 is an online magazine offering opinion, analysis, reporting and debate on global environmental issues. We feature original articles by scientists, journalists, environmentalists, academics, policy makers, and business people, as well as multimedia content and a daily digest of major environmental news. Yale Environment 360 is published by the Yale School of Forestry & Environmental Studies and Yale University. We are funded in part by the Gordon and Betty Moore Foundation and by the John D. and Catherine T. MacArthur Foundation. The opinions and views expressed in Yale Environment 360 are those of the authors and not of the Yale School of Forestry & Environmental Studies or of Yale University.


  1. Globally, the biofuels market reached $45 billion in 2009, and is estimated to grow to more than $100 billion by 2020. Today’s biofuels produced from conventional crops deliver an estimated 20-60 percent greenhouse gas emission reduction versus conventional fossil fuels such as gasoline and diesel. Expectations are that cellulosic biofuels will deliver at least an 80 percent reduction and reduce dependencies on fossil fuels.