Fossil Fuel Subsidies & Climate Change

Fossil-fuel subsidies matter. They matter for sustainable development; they matter for government budgets; they matter for the poor who benefit very little; they matter for women and accessing daily necessities such as heating, lighting, cooking and transport; and they matter for the environment in that they work in the opposite direction of a low-carbon future, impede renewable take-off, stifle energy efficiency and dwarf climate finance.  Global pre-tax subsidies amounted to US$480 billion in 2011, whilst post-tax subsidies reached US$1.9 trillion. Reforming and redirecting subsidies will be an important piece of the jigsaw if we are to solve the climate change puzzle.

19 November 2013: An interactive session on 'Reaping Emissions Reductions from Fossil-Fuel Subsidy Reform: Learning from Success Stories' was organized by Friends of Fossil-Fuel Subsidy Reform and the IISD Global Subsidies Initiative, on the sidelines of the Warsaw Climate Change Conference.

Does government support to upstream oil and gas projects benefit local communities in the Arctic? That was the topic of a panel organized by the International Institute for Sustainable Development at the Arctic Energy Summit in Akureyri, Iceland, on October 9th. The panel discussion was led by six speakers: Stewart Wheeler, Canada’s Ambassador to Iceland; Mary Simon, Inuit Tapiriit Kanatami, Canada; Mikael Anzén, Ministry of Foreign Affairs, Sweden & Head of Delegation, Sustainable Development Working Group of the Arctic Council (Mr. Anzén spoke in his personal capacity); Pauline Gerrard, Hudson Bay Inland Sea Initiative, IISD, Canada; Mikhail Babenko, WWF Global Arctic Programme, Russia; and Hjalti Jóhannesson, University of Akureyri Research Centre, Iceland.

The Intergovernmental Panel on Climate Change (IPCC) circulated its draft Fifth Assessment Report among peer reviewers last weekend. While the draft revises down the low-end of the range of this century’s projected temperature rise to 2.7°C, most scientists find that greater than 5°C is more likely, given the current trends that could double CO2 concentrations in the coming decades.

Will President Barack Obama’s Climate Action Plan put the United States on a pathway to sustainable development? And will this re-legitimize the United States as a global leader against climate change?

A draft paper by the World Bank recommends raising money to fight climate change by reducing subsidies for fossil fuels, putting a price tag of US$ 25 per tonne on carbon emissions and collecting a surcharge on aviation and shipping fuels, reports Bloomberg and The Guardian.

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?