Oil price volatility / renewables stability

[biffvernon]

But a new paper co-authored by SEI Senior Project Manager Per Klevnäs and Lord Nicholas Stern finds that oil prices are impossible to predict, and protecting economies from oil price volatility should be a priority for policy-makers.
Oil price volatility can seriously hurt the economy. The market value of oil is 5% of world GDP, its price can move by 50% within months. It is hard to reduce consumption quickly when prices rise, and this has widespread knock-on effects across other sectors. Oil price volatility can thus delay business investment, require costly reallocation of resources, reduce consumer spending, and slow job growth.
Conversely, reducing exposure to oil price volatility has economic value. Countries can do so by discouraging wasteful consumption, increasing energy efficiency, and expanding renewables.
"Governments must peg their policies to long-term energy trends rather than betting on oil prices staying low," says Stern, co-chair of the Global Commission on the Economy and Climate, which published the paper. "These prices have never been stable, and price shocks are becoming more drastic and frequent than ever before."
Instead, Stern adds, "governments should boost investment in renewable energy sources that are increasingly competitive, moving away once and for all from the current outdated carbon-intensive and unsustainable economic model. Missing this chance would be devastating for the future health of our economy and our planet."

http://sei-international.org/news-and-media/3098

[biffvernon]

Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year, equivalent to $10m every minute of every day, according to a startling new estimate by the International Monetary Fund.

The IMF calls the revelation “shocking” and says the figure is an “extremely robust” estimate of the true cost of fossil fuels. The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.

The vast sum is largely due to polluters not paying the costs imposed on governments by the burning of coal, oil and gas. These include the harm caused to local populations by air pollution as well as to people across the globe affected by the floods, droughts and storms being driven by climate change.

Lord Nicholas Stern, an eminent climate economist at the London School of Economics, said: “This very important analysis shatters the myth that fossil fuels are cheap by showing just how huge their real costs are. There is no justification for these enormous subsidies for fossil fuels, which distort markets and damages economies, particularly in poorer countries.

Stern said that even the IMF’s vast subsidy figure was a significant underestimate: “A more complete estimate of the costs due to climate change would show the implicit subsidies for fossil fuels are much bigger even than this report suggests.”

The IMF, one of the world’s most respected financial institutions, said that ending the subsidies to fossil fuels would cut global carbon emissions by 20%. That would be a giant step towards taming global warming, an issue on which the world has made little progress to date.

http://www.theguardian.com/environment/ ... s-says-imf