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November 8, 2021 | ReThinkX: Ending $6 Trillion/Year Fossil Fuel Bailouts Fastest Route To Net-Zero

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

With all the climate crisis commotion, the most obvious step is for governments globally to stop enabling the bankrupt fossil fuel sector so that free-market forces can quickly transition to already available renewable power systems.  ReThinX points out the obvious in The fastest route to net-zero is not a carbon tax:  it’s ending the $6 trillion/year fossil fuel bailout.  Here’s a taste:

What keeps societies locked-in to burning coal, oil and gas are utility monopolies supported by $6 trillion dollars a year (or $11 million a minute) of government subsidies – without which these industries would collapse under their own economic dead-weight.  

Trying to impose carbon pricing on fossil fuels while giving them trillion dollar handouts is like trying to put out a fire in a burning building by throwing out bits of burning wood while repeatedly dousing the whole structure with petrol. It doesn’t make any sense. 

The first thing we need to do to put out the fire is to stop throwing petrol everywhere. Then we’ll be in a position to put out the flames for good.   

In this context, the most effective way to accelerate the phase-out of fossil fuels is by creating open, transparent and competitive electric energy markets. This doesn’t require carbon pricing, but rather removing trillion dollar government hand-outs to incumbent fossil fuel industries, and ensuring individuals, not just utilities, have rights to generate, store and trade electricity. For instance, the new electric Ford F150 has a battery with the technology to power the average American home for about three days. Is it really necessary for every F150 owner to ask the utility for permission to power their own home with their own truck? 

In other words, we need free-market capitalism and individual freedom in electric energy markets…

Government subsidies and utility monopolies are serving to keep technically bankrupt incumbent energy industries alive by providing them an unnecessary lifeline. Expensive and unproven ‘solutions’ like carbon capture and storage only promise to prolong this lifeline to delay the inevitable. This poses the biggest obstacle to clean energy deployment.  

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November 8th, 2021

Posted In: Juggling Dynamite

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