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State spending to cut retail prices of gasoline, coal and natural gas rose 36 percent to $409 billion as global energy costs increased, the Paris-based International Energy Agency said Wednesday in its World Energy Outlook. Aid for biofuels, wind power and solar energy rose 10 percent to $66 billion.

The figures don’t include subsidies for nuclear power or to producers of fossil fuels.

Fossil fuels meet about 80 percent of world energy demand, but their subsidies are “creating market distortions that encourage wasteful consumption,” the agency said. “The costs of subsidies to fossil fuels generally outweigh the benefits.”

The Group of 20 nations in 2009 pledged to phase out state aid for carbon-based fuels dug or pumped out of the earth. In the U.S., energy subsidies are becoming an issue in next year’s presidential election after Solyndra LLC went bankrupt with $535 million of loan guarantees by the federal government…..

Nuclear power made up 5.8 percent of total energy use in 2009. State aid to atomic energy wasn’t calculated in the report, nor were subsidies to producers of fossil fuels, because of “data limitations,” the agency said…..

Seven of the nine G-20 nations the agency identified as having subsidies for fossil fuel consumers have published plans for eliminating, the aid and some have managed to raise energy prices. Still, they have failed to identify many subsidies benefitting producers of fossil fuels, which are also covered by the G-20 pledge, the report said.

“Much remains to be done to fulfill the commitments made in these international forums, both in terms of defining the fossil-fuel subsidies to be phased out and following through with durable and well-designed reform efforts,” it said.

The Organization for Economic Cooperation and Development estimated its member countries gave oil, coal and natural gas producers between $45 billion and $75 billion a year in support for production from 2005 through 2010.

Onshore wind generators will become competitive without subsidies by 2020 in Europe and by 2030 in China, the agency predicted……

While governments argue that fossil fuel subsidies are designed to help the poorest members of society, they generally fail to meet that goal, the agency said. Just 8 percent of aid reached the poorest 20 percent of each country’s population last year.

“Fossil-fuel subsidies as presently constituted tend to be regressive, disproportionately benefiting higher income groups that can afford higher levels of fuel consumption,” the report said. “Social welfare programs are a more effective and less distortionary way of helping the poor than energy subsidies.”

Cutting the payments would also help tackle climate change, the report said. Eliminating subsidies by 2020 would cut global energy demand by 3.9 percent in that year, the equivalent of 600 million tons of oil, the report said. The saving would rise to 4.8 percent by 2035.Read more: http://www.kansascity.com/2011/11/09/3256775/fossil-fuel-users-subsidies-six.html#ixzz1dM59jYGz