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| Fossil fuel policy capture |
Why this chapter is short—and it still matters
Before examining the integrity of public funds for adaptation and resilience, we must acknowledge the upstream obstacles, including subsidies, lobbying, revolving doors, and long-term contracts that favor the use of fossil fuels. These forces slow down decarbonization and distort budgets, crowding out essential investments such as flood control, resilient drainage, and early warning systems. For example, levee upgrades may be delayed and early-warning systems underfunded, leaving communities vulnerable. Think of these distortions as the gravity field around every climate project we will examine later (IPCC).
Fossil subsidies are large, sticky, and politically defended
Even after the 2022 price shock faded, fossil-fuel consumption subsidies remained enormous: the IEA estimates USD 1.1 trillion in 2023, down from a record USD 1.6 trillion in 2022 but still historically high. The OECD/IEA inventory confirms both the size and persistence of many support measures. The IMF’s wider lens, which includes implicit subsidies from underpricing environmental costs, puts total fossil fuel support at about USD 7 trillion in 2022. In developing economies, these outlays are often justified as social protection or competitiveness; however, the opportunity cost is stark: every dollar shielding fossil consumption is a dollar not invested in hardening schools, hospitals, culverts, or coastlines. For perspective, the USD 1.1 trillion in subsidies could fund flood-proofing for about 100,000 schools and secure safe havens for millions of children and communities in vulnerable areas (OECD).
Why they endure:
- Immediate political payoff: Lower fuel or electricity prices are highly visible and quickly generate public support, as households and businesses notice the benefits immediately. In contrast, the benefits of avoiding flood losses become clear only when a disaster is averted, making them less influential in immediate politics. For example, a televised protest against rising fuel prices sparked swift policy action. At the same time, a successful flood-prevention project went largely unnoticed, its impact recognized only after a catastrophe was averted. This underscores the challenge of prioritizing long-term resilience over short-term relief.
- Lobbying and policy capture: Concentrated industry benefits vs. diffuse public costs.
- Contractual lock-ins: Long-term fuel supply deals and power-purchase agreements (PPAs) that penalize early exit.
How policy capture works (and why it is a climate risk multiplier)
Policy capture occurs when powerful actors shape rules, narratives, or institutions to preserve their rents. It can be legal, through tax exemptions and permitting shortcuts, or illegal, such as bribery. Either way, the effect is the same: delayed transitions and distorted public spending. Consider a simple if-then chain: If lobbying influences legislation, regulatory oversight becomes lax; if oversight is weak, funds are misallocated. This feedback loop shows how lobbying can become a barrier to adaptation. Transparency International’s 2024/25 analysis highlights fossil-fuel corruption as a brake on climate action through lobbying, disinformation, and pressure that undermines oversight and civic voice. In the energy sector, scholars have documented regulatory capture in Indonesia and elsewhere that impedes the implementation of phase-out plans.
Typical channels:
Revolving doors: movement between ministries, regulators, and fossil firms blurs incentives.
Opaque party finance: campaign contributions and patronage networks bias policy.
Narrative capture: 'Reliability,' 'jobs,' and 'affordability' frames are often used to marginalize resilience spending and delay clean alternatives, even when these alternatives are economically feasible. These narratives raise the question: reliable for whom, and at what long-term cost? Asking this prompts critical reflection on whether short-term reliability claims serve the public interest or simply entrench existing inequalities and vulnerabilities.
The IPCC AR6 (WGIII) notes that domestic climate policy is tied to development priorities and governance constraints—conditions where capture is more likely to thrive (IPCC).
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