Press release

IISD urges Canada to take lead on global fossil fuel subsidy reform at the G20 summit

June 16, 2010

Membership in Friends of Fossil Fuel Subsidy Reform continues to grow

WINNIPEG—June 17, 2010—The International Institute for Sustainable Development is encouraged that climate change is on the agenda of the G8 and G20 meetings in Toronto next week and hopes Canada will follow-up with a solid commitment on fossil fuel subsidy reform as a critical next step.

"As chair of the G20 summit, Canada not only sets the agenda, but also has the opportunity to showcase its commitment to clean energy" said IISD CEO and president Franz Tattenbach. "Canada's promotion of fossil fuel subsidy reform at the G20 level can greatly assist the international movement towards cleaner energy and make a significant reduction in global greenhouse gas emissions."

G20 leaders issued a statement last year recognizing that fossil-fuel subsidies "encourage wasteful consumption, distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change."

"By including climate change in the G8 / G20 meetings, Canada is taking a step in the right direction to ensure that next major climate change conference in Mexico later this year yields good results," said John Drexhage, director of IISD's climate change and energy program.

Canada's deputy minister of finance Michael Horgan, in a memorandum to finance minister Jim Flaherty, outlined options to meet Canada's commitment to reform fossil-fuel subsidies. In the memo, Horgan advised quite correctly that phasing out federal tax preferences to the fossil-fuel industry would have significant benefits for Canada, notably maintaining the nation's image as a clean energy superpower and improving its reputation with respect to oil sands."

"Fossil fuel subsidies have encouraged wasteful spending and harmful greenhouse gas emissions," said Mark Halle, Geneva-based director of IISD's investment and trade program. "The removal of fossil fuel subsidies will level the playing field for the development of clean energy alternatives."

IISD's Global Subsidies Initiative (GSI) is undertaking a detailed study of Canadian fossil fuel subsidies provided by the federal government and three key provincial governments: Alberta, Saskatchewan and Newfoundland and Labrador. Initial findings show that the oil industry currently benefits from more than 40 different subsidy programmes, mostly in the form of preferential tax treatment and investment incentives for exploration and drilling. The results of the study are due to be published in October 2010.

‘Friends' update

Membership in the newly-formed Friends of Fossil-Fuel Subsidy Reform spearheaded by New Zealand is growing with Norway, Switzerland and Sweden joining this week. The informal group of developed and developing non-G20 countries is committed to working with the G20 as it tackles a politically and economically complex initiative for reform.

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For more information, please contact IISD media and communication officer, Nona Pelletier, Phone: +1-(204)-958-7740, Cell: +1-(204)-962-1303 or GSI research officer Kerryn Lang, Phone: +41 (22) 917 8920.

About IISD

The International Institute for Sustainable Development (IISD) is a globally recognized think tank with 3 decades of experience working to solve the world’s most pressing sustainable development challenges. We combine deep expertise in a wide range of issues with a collaborative approach to research, policy advice, and hands-on support to ensure these solutions are brought to life. Headquartered in Winnipeg, Manitoba, we are a diverse team of over 300 professionals working from offices in Canada, Switzerland, and other locations around the world.