Fossil Fuel Subsidies & Climate Change

Federal government uses hundreds of millions in taxpayer dollars to support the fossil fuel industry, keeps true cost of subsidies hidden from Canadians

In their closing statement at the UNFCCC COP 23 in 2017, the world’s 47 least developed countries requested that the Talanoa Dialogue include “managing a phaseout of fossil fuels”. The 2018 Talanoa Dialogue is a crucial opportunity to increase climate mitigation ambition and effectiveness by putting fossil fuel phase-out on the international climate agenda.

Two events this September set a new bar for climate change leadership. First, over 340 non-governmental organisations from 67 countries signed the Lofoten Declaration. This document calls for an end to exploration and expansion of new oil, gas and coal reserves, a managed decline of the oil, coal, and gas industry, and a just transition to a safer climate future.

The combined impact of fossil fuel subsidy reform (FFSR) and an increase in gasoline and diesel fuel taxation could do three things: save and raise money for governments; reduce emissions; and provide upfront and ongoing domestic resources to fund sustainable development and the sustainable energy transition.

This working paper explains how different production subsidies currently unlock “zombie energy” from fossil fuel deposits that would not be commercially viable to produce without government support.