Renewable Energy Subsidies & Fossil Fuel Phase-Out

Kerosene subsidies are expensive: estimated to be more than US$ 4 billion in West Africa and more than US$ 5 billion in India. What are governments—often with highly limited resources—achieving by spending all this money? And with an increasing number of countries committing to reform subsidies, what will it mean for energy access if these policies are removed?

Just a few days before the G-20 Leaders’ Summit in Antalya and the UNFCCC’s COP21 in Paris, hundreds of Turkish experts, scholars and activists gathered in Istanbul from 12-13 November 2015 at the IKLIM Climate Forum, under the banner “Ben de Varim!” (“Count me in, too!”).

When it comes to phasing out subsidies to the production of polluting oil, gas and coal—something G-20 leaders have committed to every year since 2009—we’re seeing little progress. In fact, as fossil fuel prices have fallen, some countries have even increased subsidies in response.

The cost to society of coal use includes the financial cost of providing subsidies to the coal industry in addition to the cost of externalities. This report explores the cost of coal in terms of subsidies and externalities and discusses the extent to which coal subsidies act as a barrier to the development of renewable energy. It finds that China is supporting the coal industry through the provision of billions of dollars’ worth of subsidies to consumers and producers. In addition to the financial cost, these subsidies increase the consumption of coal, producing externalities including air pollution and greenhouse gas emissions.

Since April 1st 2015, India’s cooking gas subsidies have been distributed solely by electronic transfer through the Direct Benefit Transfer for Liquefied Petroleum Gas scheme (otherwise known as DBTL or PAHAL).

In New York this weekend (25–27 September) over 100 heads of state and government attended the UN Sustainable Development Summit to adopt the "Sustainable Development Goals" (SDGs) – the development agenda for the world for the next fifteen years. The goals cover 17 areas including their "Means of Implementation", which is how these goals will be funded.

Beijing—September 16—The first estimate of subsidies to coal producers in China, totaling CNY35.7 billion (US$5.6 billion) in 2013, has been revealed by the Global Subsidies Initiative (GSI) at the Coal and Renewable Energy event held in Beijing on 16 September 2015.

In January 2015, Suhail Al Mazroui, the Minister of Energy in the United Arab Emirates (UAE), announced that lifting energy subsidies was 'just a matter of time'. Six months on, that time appears to have come. On 22 July, the United Arab Emirates (UAE) government announced that the prices of gasoline and diesel will be deregulated from 1 August.