Renewable Energy Subsidies Worldwide Reached $57 Billion in 2009, IEA Says

Global subsidies for renewable energy totaled $57 billion in 2009, International Energy Agency Chief Economist Fatih Birol said today, providing the agency’s first estimate of assistance for the industry.

The support compares with $312 billion for fossil fuels in the same year, mainly in developing countries, Birol told reporters in London. Support for renewables will rise to $110 billion in 2015, though the industry faces a “challenge” with many countries trying to cut budget deficits, he said.

“In the absence of government support, many renewable energy technologies will struggle to survive, especially in a cheap-gas environment,” Birol said. U.S. natural gas futures last month fell to a 13 month-low.

About $5.7 trillion will be invested in electricity generation from renewables such as wind and solar power during the next 25 years, according to the agency’s World Energy Outlook, published today. Government support for the industry can be justified “by the long term economic, energy security and environmental benefits they can bring,” the agency said.

The IEA’s estimate on renewable energy power compares with $43 billion to $46 billion that Bloomberg New Energy Finance in July estimated was handed to the industry last year by governments in the form of grants, tax credits and guaranteed electricity prices known as feed-in tariffs. The agency estimated that last year $37 billion of support was given to electricity from renewable power, and $20 billion to biofuels.

Climate Talks

The agency also said that the non-binding emissions targets for 2020 agreed by countries including the U.S. and China at last year’s climate talks in Copenhagen “fell a very long way short of what is required to set the world on the path to a sustainable energy system.”

If implemented, the Copenhagen goals will make it “all but impossible” to limit global warming to 2 degrees Celsius (3.6 Fahrenheit) since the pre-industrial era, the body said.

The targets added $1 trillion to the price tag of preventing dangerous increases in temperatures because deeper and faster emissions cuts will be needed after 2020, the report said. UN climate talks resume Nov. 29 in Cancun, Mexico.

G-20 leaders, who meet Nov. 11-12 in Seoul, agreed at their last meeting in Toronto in June that they would work "over the medium term" to phase out "inefficient fossil fuel subsidies that encourage wasteful consumption."

The IEA said today that eliminating the subsidies would "have a dramatic effect" on the global energy system, reducing emissions and enhancing energy security.

To contact the reporter on this story: Alex Morales in London at

To contact the editor responsible for this story: Reed Landberg at

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