Fossil fuels have been a long-debated topic. Their impacts on the environment are undeniable, both in ground-level disruption and air pollution. However, the industry holds a significant number of jobs, which in turn contribute to the economy. Renewable energy is often dismissed for being too expensive compared to the economic advantages of fossil fuels. But fossil fuels may not be as profitable as they are presented.

The Canadian government heavily subsidizes fossil fuels. A subsidy is a cash transfer, tax break, or other monetary support that reduces the cost of a purchase. These subsidies go to companies that invest in fossil fuels and consumers that purchase them. Subsidies can apply to research and development, drilling, shipping, and energy production. The International Institute for Sustainable Development (IISD) estimated that in Canada $5 billion per year is put towards subsidizing fossil fuels. There are conflicting estimates from various studies, some saying tens of billions while others estimating millions.

Subsidies can be beneficial in supporting communities with costs that would otherwise be extremely large. For example, subsidies could help with a transition to renewable energy, by supporting sustainable energy sources. The problem is not the subsidies themselves, but the industries that they support. According to the website Investopedia, subsidies can help reduce the cost of producing a product or service, which reduces the cost that the consumer pays. Subsidizing education or healthcare helps teachers and healthcare workers provide better care and services, which benefits entire communities. Subsidizing fossil fuels benefits corporations.

Subsidizing fossil fuels while implementing a carbon tax is not going to be effective. As stated by IISD in their article “Unpacking Canada’s Fossil Fuel Subsidies” (Corkal & Gass, 2016), fossil fuel subsidies counteract climate actions by making fossil fuels cheap, appealing investment opportunities. Fossil fuel subsidies have impacts on community programs as well. IISD calculates that the subsidies could pay for the education costs of 360,000 students, provide job training for 480,000 workers, and cover healthcare for 880,000 people. Instead, the Canadian government is putting money and support into fossil fuel production.

Removing fossil fuel subsidies is an important goal, but it is not a complete solution. A study published by Nature, “Limited emission reductions from fuel subsidy removal except in energy-exporting regions” suggests that raising fossil fuel prices will only have a significant impact on countries that make a large income by exporting fossil fuels. The study also found that removing fossil fuel subsidies would not increase global use of renewable energy sources. These subsidies are not the only factor making fossil fuels profitable, and removing them does not guarantee a complete fix. However, fossil fuels still have an enormous impact on climate change. Removing the subsidies should be understood as a first step, one that must be taken with additional measures to have true impact.