A new report modelling the removal of fossil fuel subsidies in 20 countries showed such a move would reduce national emissions by an average of 11%.
Rampant Fossil Fuel Subsidies
The call for an end to renewable energy subsidies can often be heard reverberating around the world, with governments, lobbyists, and the vaguely uninformed believing that the only reason their electricity bills are higher than they would like is because they are funding renewable energy technologies that can’t stand on their own.
Not only can renewable energy stand on its own, as we have seen for onshore wind and solar, but renewable energy subsidies aren’t the only thing taxpayers are paying for, considering the astronomical amount of fossil fuel subsidies currently doing their damnedest to prop up a dying industry.
According to a report published in September by the Carbon Tracker Initiative, not only is the fossil fuel industry the recipient of “numerous subsidies” around the world, but some of these subsidies have actually gone so far as to push into production coal reserves that would otherwise not have been supported, desired, or affordable. “The subsidy fundamentally altered the final investment decision,” explained the report’s authors. “It is in this context that this report frames fossil fuel subsidies, in particular production subsidies, as project and investment ‘enablers’.”
A subsequent report published by the OECD revealed almost 800 spending programs and tax breaks currently in use throughout the 34 OECD countries, as well as 6 additional emerging G20 nations, designed to subsidize fossil fuels. Another report, this time by the International Monetary Fund, revealed that the world is subsidizing fossil fuels to the tune of $5.3 trillion each year.
“Governments are spending almost twice as much money supporting fossil fuels as is needed to meet the climate-finance objectives set by the international community, which call for mobilising 100 billion US dollars a year by 2020. We must change the course,” explained OECD Secretary-General Angel Gurría. “This new OECD Inventory offers a roadmap to turn around harmful policies that are a relic of the past, when pollution was still seen as a tolerable side effect of economic growth.”
Cull Fossil Fuel Subsidies, Cull National Emissions
The real damage, however, is revealed in a new report published last week by the International Institute for Sustainable Development (IISD) and the Nordic Council of Ministers (NCM), which found that removing fossil fuel subsidies in 20 countries between now and 2020 would reduce national emissions by an average of 11%.
Furthermore, if 30% of the subsidy savings were redirected towards investing in renewable energy and energy efficiency, national emissions would be reduced by an average of 18% by 2020. The report, Tackling Fossil Fuel Subsidies and Climate Change: Levelling the energy playing field, also found that removing fossil fuel subsidies from these 20 countries alone would end up removing an estimated 2.8 Gt of CO2 from the atmosphere.
“The numbers point to an important opportunity for both national carbon emissions reductions, and for financing the transformation of our energy systems,” said Scott Vaughan, president-CEO of IISD.
“With average yearly financial savings to governments of around US$ 93 per tonne of carbon removed from the system, fossil fuel subsidy reform is one policy tool that governments can no longer afford to ignore,” added Anna Lindstedt, Climate Ambassador for Sweden.