G20 Nations Spending $452 Billion On Fossil Fuel Subsidies
A new report has concluded that members of the G20 are providing $452 billion per year on fossil fuel production subsidies.
Despite numerous pledges to minimize or cut fossil fuel subsidies entirely, and amid tremendous international and public pressure, member nations of the G20 major economies are doing all they can to keep the fossil fuel production industry afloat. The new report, Empty Promises: G20 subsidies to oil, gas and coal production, published Thursday by the Overseas Development Institute (ODI) and Oil Change Institute (OCI), gathered and analyzed detailed subsidy information from all G20 nations for oil, gas, and coal production.
“G20 governments are paying fossil fuel producers to undermine their own policies on climate change,” said Shelagh Whitley, of the Overseas Development Institute (who speaks more about the report in the video below). “Scrapping these subsidies would rebalance energy markets and allow a level playing field for clean and efficient alternatives.”
Fossil Fuel Subsidies
Fossil fuel subsidies has been a hot topic for a while now, not least over the last few months as mounting pressure looms over all the countries set to attend the UN climate talks in Paris later this month. A report published in September by the Carbon Tracker Initiative found that not only are governments around the world subsidizing coal production to the hilt, but that some of these subsidies are opening coal reserves that would not have been touched without existing subsidies, therefore heavily distorting the market.
And distorting the market is something that fossil fuel proponents the world over have time and time again decried is happening when governments subsidizes burgeoning renewable energy technologies like solar and wind.
A similar report published again in September, this time by the
“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.”
The absurdity of fossil fuel subsidies, beyond the obvious, was made quite clear in October by another report which showed removing fossil fuel subsidies in 20 countries would reduce national fossil fuel emissions by 11%.
$452 Billion Annually On Fossil Fuel
With the UN climate talks in Paris quickly approaching, this new report will hopefully garner significant attention during talks, due to the massive and widespread subsidization of the fossil fuel industry.
The ODI report found that G20 governments are providing almost $78 billion per year on national subsidies for national production, another $286 billion per year is invested through state-owned enterprises, with another $88 billion invested through public finance (in 2013).
Japan is a well known proponent of coal power, and in 2013 and 2014 the country provided more public finance for fossil fuel production than any other G20 nation, averaging $19 billion per year — of which $2.8 billion annually was made up in financing for the coal industry.
The United Kingdom stands out as the only G7 nation that is currently “significantly ramping up its support for the fossil fuel industry,” with even more tax breaks and industry support provided for oil and gas companies working in the North Sea in 2015 — this despite numerous pledges by the government in support of the Friends of Fossil Fuel Subsidy Reform. The United States shelled out more than $20 billion in national subsidies alone, while Australia and Brazil both provided around $5 billion in national subsidies.
Russia, in what must be an attempt to beat out everyone on everything, forked out almost $23 billion in national subsidies, the highest of all G20 countries.
China, by contrast — a surprising contrast — provided national subsidies of over $3 billion annually during 2013 and 2014, which includes grants for coal producers, and support for the research and development of fossil fuel production (which does include carbon capture and storage).
“Continuing to fund the fossil fuel industry today is like accelerating towards a wall that we can clearly see,” said Stephen Kretzmann, director of Oil Change International. “G20 leaders need to slow down and turn us around before we hit climate disaster.”
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