That was more than the entire gross domestic product of Argentina, Poland or Iran. And it is not all.
Global fossil-fuel subsidies in 2017, including those from non-G20 countries, topped $3.1 trillion, a sum higher than the wealth of all but the four richest nations on the planet - and nearly 20 times what was spent on renewables.
It could be argued that this money is important in helping to lift developing nations out of poverty and keeping the lights on in more advanced societies. And there is no doubt that the world as we know it today simply would not function without fossil fuels.
Despite great strides in electrification and renewable energy development, it is true that we still rely on coal, gas and oil to power most of our homes, businesses and modes of transport. And yet, is it fair that fossil fuels should get so much money—ultimately from taxpayers?
After all, this is a mature industry and makes plenty of money. As of March this year, the national oil company Saudi Aramco was the second richest company on the planet, with a market capitalization higher than Italy’s entire gross domestic product.
Three other oil majors were in the top 100, and that was after 18 months in which fossil fuel company stocks have been hammered. If any industry can stand on its own feet, oil and gas would seem to be the one.
Plus, the oil and gas sector has historically benefited from the fact that it has not had to pay for its externalities. When these costs are taken into account the fossil fuel industry is believed to have benefited to the tune of $5.2 trillion in 2017, or 6.5% of global gross domestic product.
The contrast with renewables is stark. Yes, wind and solar power received sometimes generous subsidies in the early stages of their development, but increasingly they are being forced to compete on a subsidy-free basis.
The world’s first subsidy-free offshore wind farm, for example, began construction in June. This is a remarkable feat for a technology that has only been in existence for two decades. And it is nothing compared to energy storage.
Battery projects have had pay their own way since the inception of the energy storage market. Not only do they not enjoy subsidies, but in many markets the regulators are still trying to work out how batteries can or should get paid.
This is despite the immense value that batteries can and will bring to the energy system. It is no exaggeration to say that the future of society will depend on energy storage.
The intermittent renewable energy sources that must power our world if we are to avoid cataclysmic climate change can only balance demand with the help of batteries and other storage assets. Batteries will be key to our electric and transport systems.
And since they will likely play a key part in maintaining constant supplies of electricity to electrolyzers, they could also be critical for the upcoming hydrogen economy. This will complement electrification within the power system and also provide a bedrock for many industrial and chemical processes.
The big challenge we face right now is whether renewables and energy storage can scale up quickly enough to meet global targets for carbon reduction, keeping climate change at bay. It’s touch and go and there is no guarantee of success. Large amounts of investment would certainly help.
So it is somewhat perverse that while renewables are having to compete without subsidies, and batteries have never even had the luxury of support schemes, the oil and gas sector continues to rake in enough public cash to shore up a decent-sized national economy.
This is not a plea for energy storage to get the same treatment as oil and gas, however. A more elegant solution is to create a global carbon market that puts a realistic price on emissions—and use the money generated to help fund the energy transition.
Carbon markets already exist in places such as Europe, but they have so far failed to gain the traction needed to become really effective. Currently, for example, the price of carbon in the European Emissions Trading Scheme is between €50 and €60 a metric ton.
This is a vast improvement on historic rates, which for most of the last two years have hovered between €20 and €30 per metric ton. But is still not enough to serve as a disincentive to emitters and an incentive to low-carbon investors.
The consensus is that pricing needs to go north of around €100 per metric ton for oil and gas companies to start taking evasive action—for instance, by building out carbon capture and storage or committing more fully to renewable energy sources.
Similarly, a higher carbon price would improve the competitiveness of ‘green’ hydrogen produced from renewable energy, hastening the growth of a market that could serve as a key pillar in achieving global decarbonization goals.
Energy storage would benefit from all these trends because it would be increasingly needed to firm up intermittent renewable generation, either for electricity generation or to power electrolyzers. And it would still not require a cent in subsidies.
The irony is that oil and gas companies, by and large, are on board with the idea of carbon pricing. They see it as key to justifying low-carbon technology investments that they want to make but that don’t currently pan out from a financial perspective.
Fortunately, moves to scale up carbon markets are afoot. The Taskforce on Scaling Voluntary Carbon Markets this month launched a report setting out steps for the creation of a scaled, high-integrity voluntary market for the trading of carbon credits. Let us hope policymakers read it and take heed.