Report: Just Ten Percent of Global Fossil Fuel Subsidies Would Completely Pay For a Global "Green Transition"

Stephanie Kelton explaining what Ben Bernanke meant in 2009 when he said the Fed doesn't "spend tax money" when it transfers money to banks, but simply changes numbers in a computer. "To lend to a bank, we simply use a computer to mark up the size of the account they have with the Fed." Kelton: "It's exactly like putting points on the screen at a baseball game," and a scorekeeper can "never run out of points."

by Thomas Neuburger

I'm not a fan of the "how are you going to pay for it?" scam, since it's obvious the government never pays for anything it really wants in the sense of raising new revenue. It just spends the money. For proof, just look at the Iraq War, or any recent war, or any Republican tax cut plan. (See the video above for a slightly longer explanation of why governments that control their own currency never have to tax to spend.)

The fact is, a government that issues its own currency and whose economy is not ravaged by inflation can always write checks to buy anything it wants — and the idea that it "pays for" what it wants by selling bonds is a fiction, since every bond sale is a trade of an asset for an asset, not a loan. The Treasury market also gives rich people something safe to invest in. Neither of these goals is related to financing government spending.

But for those who do fetishize "paying for it," here's one for the books.

Everyone knows that at some point, the burning of fossil fuels will have to stop completely. In fact, it will stop completely; the only question is whether will be stopped voluntary, because we chose to stop — or involuntary, because there are so few of us left that it won't change atmospheric CO2 no matter what the survivors burn.

As a consequence, everyone also knows that in order to end fossil fuel use, global governments will have stop paying companies like Exxon to dig up more carbon to burn. In other words, global fossil fuel subsidies will have to go to zero.

Turns out that if fossil fuels subsidies did go to zero, enough money will be freed up to "pay for" a complete "green transition" — perhaps as many as ten of them.

Damian Carrington, writing at the Guardian, explains:

Just 10% of fossil fuel subsidy cash 'could pay for green transition'

Redirecting small portion of subsidies would unleash clean energy revolution, says report 

Switching just some of the huge subsidies supporting fossil fuels to renewables would unleash a runaway clean energy revolution, according to a new report, significantly cutting the carbon emissions that are driving the climate crisis.

Coal, oil and gas get more than $370bn (£305bn) a year in support, compared with $100bn for renewables, the International Institute for Sustainable Development (IISD) report found. Just 10-30% of the fossil fuel subsidies would pay for a global transition to clean energy, the IISD said.

Ending fossil fuel subsidies has long been seen as vital to tackling the climate emergency, with the G20 nations pledging in 2009 to phase them out, but progress has been limited. In May, the UN secretary general, António Guterres, attacked subsidies, saying: “What we are doing is using taxpayers’ money – which means our money – to boost hurricanes, to spread droughts, to melt glaciers, to bleach corals. In one word: to destroy the world.”

As Richard Bridle, IISD Senior Policy Advisor, put it in the IISD press release, "Public money is far better spent delivering the clean energy transition than propping up the fossil fuel industry." He's careful to point out that the "reform of subsidies alone is not enough to meet global emissions targets," but we knew that. Ending fossil fuel subsidies isn't the same as ending fossil fuel emissions, but it's a necessary first step.

I'll go one further than Bridle. Any U.S. presidential candidate who does not favor ending carbon fuel subsidies at the fastest possible rate is not serious about climate change, independent of any other words that emerge from her mouth.

In fact, any U.S. presidential candidate who does not run on ending carbon fuel subsidies is the enemy of everyone else on the planet.

In the long run, meaning in the lives of our grandchildren, will it matter if that candidate is marginally less bad than Trump? Our grandchildren, as they're cooking what they've killed over a fire in a neo-paleolithic cave, will still ask, "Who's Trump? I don't think he's the one who did this to us."