Fossil fuels receive 10 times as much government funding as renewable energy, report says

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A recent report by Bloomberg New Energy Finance has found that government support for the oil, coal and fossil fuel industries dwarfs spending on renewable energy and biofuels.

The study reveals that in 2009, governments worldwide invested between $43 billion and $46 billion on renewable energy and biofuel technologies, projects and companies. This includes measures such as feed-in-tariffs, renewable energy credits or certificates, tax credits and grants, among others.

However, in contrast to the $557-billion spent in 2008 subsidizing fossil fuels, the number seems paltry. Michael Liebreich, CEO of Bloomberg New Energy Finance, attributes the stark contrast in numbers to a belief that renewable energy will not take hold without direct government support.

Furthermore, he points out that this number could be on the low side of estimates, considering that it fails to take into account "the enormous security and public health costs of fossil fuels, as well as the appalling pollution catastrophes on the Gulf Coast, the Niger Delta and elsewhere."

The U.S. sits at the top of the list for providing direct subsidies for clean energy. Last year, the country spent approximately $18.2 billion on clean energy, with an estimated 40 percent of that money supporting biofuels.

However, the report predicts that the divergence in spending on subsidizing fossil fuels and clean energy should narrow significantly in 2010. Based on research, the group believes that support for clean energy will grow as $188 billion in global stimulus funds for clean energy accelerates. The report also shows that government spending to keep fossil fuel prices artificially low is no longer necessary to make them affordable.

At the end of July, foreign energy ministers representing 24 countries met and agreed on 11 clean energy initiatives, Reuters reports. The delegates pledged to improve the energy efficiency in appliances and buildings, help developing countries implement low-carbon technologies and accelerate deployment of smart grid technology.

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