This November, Oil Change International and Earth Track published the first independent evaluation of the G-20 commitment to phase out inefficient fossil-fuel subsidies, G-20 Fossil-Fuel Subsidy Phase Out: A review of current gaps and needed changes to achieve success.
This November, fishsubsidy.org launched an interactive map that allows users to track €3.4 billion (US$ 4.7 billion) in EU fisheries subsidies: 39,174 payments to vessels from 1994 to 2006 under the Financial Instrument for Fisheries Guidance (FIFG).
Unlike subsidies to fossil-fuel consumers, there is currently little hard data about the size or impacts of subsidies to fossil-fuel producers. The Global Subsidies Initiative’s new series, Fossil Fuels - At What Cost?, aims to rectify this situation by identifying and where possible quantifying these ‘producer subsidies’, using an internationally agreed definition of subsidy adopted by the World Trade Organization.
The latest in the Global Subsidies Initiative’s series of Policy Briefs, Delivering on G-20 Commitments: The path to fossil-fuel subsidy reform, summarizes what has been done since the G-20 committed to phase out and rationalize inefficient fossil-fuel subsidies that lead to wasteful consumption, including reports to the June 2010 Toronto Summit.
November 8, 2010
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Carlos Galperín
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María Victoria Lottici
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María Cecilia Pérez Llana
Energy subsidies are a long-debated issue as regards their efficacy, efficiency and relationship with the problem of climate change. These questions have been recently included on the agenda of the G-20, after the Leaders’ Summit held in Pittsburgh in September 2009. Paragraphs 29 and 31 of the Leaders’ Statement set forth a course of action for member countries. In those paragraphs, fossil-fuel subsidies are questioned on the grounds that they can be inefficient and encourage wasteful consumption, and it is therefore proposed to phase them out over the medium-term, while recognizing the importance of providing those in need with essential energy services.
This October, the International Budget Partnership (IBP), part of the US non-profit organisation the Center on Budget and Policy Priorities, published preliminary findings from the Ask Your Government! initiative, an ambitious research project to investigate what happens when citizens around the world ask their governments for specific budgetary information relating to key international development commitments – including the enquiry, “What was the total amount actually incurred during the past three fiscal years on subsidies for oil, gas and coal production and consumption?”
For decades there has existed a community of researchers – spanning government ministries, international organisations, academia and civil society – working to increase the world’s understanding and awareness of harmful subsidies. Since September 2009, when the G-20 committed to phase out and rationalize inefficient fossil-fuel subsidies that lead to wasteful consumption and distorted long-term energy investments, much attention has turned to the subject. Marking just over a year after this agreement was reached, and in the run-up to the G-20’s Seoul Summit on 11−12 November, Subsidy Watch contacted Professor Cees van Beers and André de Moor, part of the fossil-fuel subsidy research community since the 1990s, and asked for a retrospective: how far have we come and how far have we yet to go?
Earlier this summer the GSI published a 150-page manual, Subsidy Estimation: A survey of current practice. The document is mostly a compilation of verbatim quotations on definitions of subsidies from various inter-governmental organizations, and documentation of estimation methods for particular subsidy elements. It is intended for use primarily by individuals who are interested in preparing estimates of subsidies to particular products or sectors—people who engage in what might be called “subsidy accounting.” But we hope that it will also serve as a catalyst for kick-starting a dialogue on the need for a common, consistent set of international “subsidy accounting standards”.
In the last 12 months, the reform of fossil-fuel subsidies has been high on international agendas: the G-20 and APEC have committed to phase out inefficient fossil-fuel subsidies and the ‘Friends of Fossil-Fuel Subsidy Reform’ group of countries was established, to encourage and support the G-20 initiative.
According to the latest OECD monitoring report on agricultural subsidies, Agricultural Policies in OECD Countries at a Glance 2010, subsidies to OECD country farmers increased on average from 21% to 22% of their total receipts, with this increase moving from 22% to 24% in European Union countries. This marks the first such increase in five years. The change is thought to have been largely caused by falling commodity prices in 2009.