“The G20 committed for the first time in 2009 to phase out fossil fuel subsidies”.
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The world’s 20 top economies spend more than $400 billion dollars each year propping up fossil fuel production, a practice that threatens to seriously undermine the world’s mitigation of climate change, according to a new report by the environmental advocacy group Oil Change global. The findings are part of a broader report on subsidies given to G20 countries ahead of the forthcoming G20 Leaders Summit in Antalya, Turkey, set to take place November 15-16. The so-called Pittsburgh Declaration arrived in the run-up to the United Nations climate talks in Copenhagen, and was expected to inject a few life into the summit, which, ultimately, fell flat.
Despite calls by USA president Barack Obama to scrap fossil fuel subsidies, the world’s largest economy spent more than $20bn in national subsidies, the report said. “We can’t tackle the climate change problem if we are propping up the production of fossil fuels”.
The reason things were going in the wrong direction was simple, he said: money. But in a few ways, production subsidies are very scandalous.
“By providing subsidies for fossil fuel production, the G20 countries are creating a “lose-lose” scenario”.
It added, G20 governments needed to adopt strict timelines for phasing out fossil fuel subsidies and transfer government financial support to greener forms of energy.
On a more positive note, the report also found that G20 governments had a tremendous opportunity to meet the climate challenge by shifting the investment of state-owned enterprises away from fossil fuel production toward clean energy.
However even these are conservative estimates, and there have been difficulties obtaining data due to a lack of transparency within the energy sector.
At the end of September 2015, the USA and China jointly prioritized the establishment of a concrete deadline for the phase-out of fossil fuel subsidies as a key task during China’s G20 presidency in 2016. “They’re not being clear about it”.
The report said the amount spent by G20 governments on fossil fuel subsidies was more than three times the amount spent by the world on subsidies to the renewable energy industry.
“It’s true that a lot of other research and analysis focusses on consumer subsidies, which do have a significant impact on climate change and the budgets of the world’s major economics”.
Canada’s petroleum and mining companies have long argued they need subsidies to stay competitive in a high-risk exploration industry.
According to the report – compiled by Oil Change worldwide and U.K.-based think tank Overseas Development Institute – national subsidies to oil, gas and coal producers amount to $20.5 billion annually in the USA, with nearly all of those being received in the form of tax or royalty breaks.
In an interview earlier this week, Foreign Affairs Minister Stéphane Dion – who heads a cabinet committee on environment, climate change and energy – said the new government intends to move on that commitment, which was in the party’s election platform.
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State owned companies: Government-owned oil and gas companies that benefit from government involvement. “Scrapping fossil fuel subsidies would rebalance energy markets and allow a level playing field for clean and efficient alternatives”. When it came to straightforward subsidy, Russian Federation was the most generous supporter of its fossil fuel producers, channeling over $22 billion to them in the year 2013-4. Doukas cautioned that a few of the subsidies were not easily quantifiable and the figures in the report are likely underestimates. That means that federal leases for the Powder River Basin are a really good deal for coal companies, saving them the equivalent of a $1 billion subsidy each year.
