Carbon offsetsThe amount of money that polluting businesses spend on projects that benefit our environment has been increasing in recent years. However, it is still far from matching the amount that governments spend supporting businesses that harm the environment.
A report(pdf) Published February 16, 2005 Earth TrackThe Cambridge-based organization ‘Government Subsidies Tracking’ estimated the global value government support for the most polluting sectorsfossil fuels and agriculture, forestry, transport, and marine capture fisheries. It found that they averaged at least $1.8 trillion per year.
For comparison, the Taskforce for Scaling Carbon MarketsA private sector coalition called, estimated that the carbon offset market was worth $300 million in 2018, which was the most recent year available. This amount is 6,000x less than the $1.8 trillion that the world’s governments spend on environmentally damaging subsidies. The Taskforce estimates the offset market could reach $100 billion by 2030. That’s still 18 times less that current government subsidies.
Earth Tracks is the first to estimate environmentally harmful government subsidies globally in more than a decade. Although sectoral comparisons can be useful, they also show how governments assign value via incentives. According to the Earth Tracks report, the US spent $72 Billion in covid relief in 2020 to support the fossil fuel industry and intensive users of fossilfuels. This was 2.6 times more that the $27.7 Billion spent subsidizing clean energies. Energy Policy TrackerThis site provides real-time data about energy subsidies since February 2020, when the pandemic began.
What are environmentally harmful subsidies?
Select industries have been subsidized for a long time. This helps to keep them afloat and makes them more profitable and more likely to survive. Many of the most heavily subsidized industries are those that are detrimental to the environment. The major contributor to carbon omissions is the fossil fuels industry. It receives $640 billion annually in subsidies. These include tax credits and underpricing, for the use of fuel transport infrastructure, on the production end, and tax exemptions for certain users on the consumption side.
Industrial agriculture is a form of agriculture that causes environmental damage through soil erosion and water pollution. Emissions of substantial magnitude$520 billion annually in subsidies, such as price floors and below-market pricing for irrigation or fertilizer costs, goes to the United States.
$350 billion per year is spent on unsustainable freshwater management and infrastructure for wastewater that pollute waterways, endanger river and ocean ecosystems, and cost $350 billion annually.
Subventions are notoriously difficult to track due to lack of transparency from both the government and the businesses that receive the money. Earth Tracks is based on data from non-governmental organisations, governments, and intergovernmental agencies that collect information at the sector, country, and industry levels. The cost of externalities, such as traffic congestion and air pollution, that result from the fossil fuel industry, is not included in the tally.
Offsets might not be the best way for the environment to be protected
The report proposes that environmentally harmful subsidies be eliminated or redirected toward climate and environmental projects. Public funds could then go to businesses that help improve climate outcomes instead of worsening them. According to the report, it will take approximately $700 billion per year to stop biodiversity loss and achieve net-zero emission. This money should be used to pay for switching to cleaner fuels and reorganizing energy-intensive industries to reduce emissions.
Carbon offsets are more like penance. They absolve businesses of their climate sins and allow them to continue polluting. This label is easy for businesses to exploit and has no environmental benefits. Also known as greenwashing. Without strong oversightSome of the $300,000,000 spent on offsets is likely to be used to support environmental harm.
