The cost of propping up oil

The Environmental Investigation Agency points out in its 2012 World Economic Outlook, dirty energies receive more financial support from governments than clean ones. Global fossil fuel subsidies, taking the form of tax credits, soft loans or trade measures, reached $409 billion in 2010, compared to $60 billion for renewable energy subsidies.

“We need to avoid falling into the short-term trap of a fossil fuel strategy,” says James Vaccaro, Head of Market and Corporate Development at Triodos Bank: “The ‘dash for gas’ mentality is like saying, ‘Stay warm this winter by burning your own furniture’.”

“These dirty-energy subsidies dwarf the support given to clean energy”, says Peter Madden, CEO of Forum for the Future.

Moreover, it risks missing out on large-scale investments attached to the growing renewables market. Molho points to Denmark and Germany as examples of governments that have smartly laid out long-term policy frameworks to encourage renewables – complemented, in both cases, by energy efficiency incentives for businesses. What does this mean for local businesses? For a start, they can afford to turn to sustainable energy producers – the equivalents of  Ecotricity in the UK – and to invest in on-site renewables, offered by technology firms like Caplor energy

This bold approach has also boosted both countries’ economies, and fostered the development of new businesses to secure local supply chains for the emerging technologies. It’s no surprise that Denmark and Germany host the two largest wind turbine manufacturers in the world: Vestas Wind Systems and Siemens Wind Power.

The question is, why would the UK plough more money into fossils, coal and nuclear, at the expense of real progress to harness the wind, the sun and the sea?