Fossil fuel subsidies prevent transition to renewable energy sources finds new IISD report
FOR IMMEDIATE RELEASE
WINNIPEG—10 December 2014—The $548 billion USD that is paid annually in fossil fuel subsidies around the world is preventing a crucial transition to renewable energy sources. This is according to a new report released today from the International Institute for Sustainable Development (IISD).
The Impact of Fossil-Fuel Subsidies on Renewable Electricity Generation finds that fossil fuel subsidies make fossil fuel power generation appear cheaper than it really is, adversely impacting the competitive position of renewable energy sources. The report also finds that fossil fuel subsidies provide benefits to fossil-fueled incumbents that are preventing new renewable energy entrants access to the market.
“Fossil fuel subsidies are harming the sustainability of the electricity sector, and so they must be phased out,” said Peter Wooders, director of IISD’s energy program. “Not only are they a bad use of public funds, but they also mean that taxpayers are effectively paying to prevent a transition to a sustainable electricity sector.”
The report shows how important fossil fuel subsidy reform is to credible action on climate change. "Governments putting a price on carbon and simultaneously subsidising fossil fuels is the most extreme form of policy incoherence," said Tim Groser, New Zealand’s minister of Trade and minister of Climate Change. New Zealand is a member of the Friends of Fossil Fuel Subsidy Reform, which is a group of seven countries that advocate for the reform of harmful fossil-fuel subsidies.
This report will be launched at a side event of the United Nations Framework Convention on Climate Change summit (COP 20) in Lima, Peru on Wednesday 10 December from 15:00 – 16:30. This panel discussion will address the link between fossil fuel subsidies, their reform and a low-carbon future.
IISD has also produced an infographic to illustrate how fossil fuel subsidies are holding us back from reducing carbon emissions.
The International Energy Agency’s latest estimates indicate that subsidies for the consumption of fossil fuels worldwide amounted to $548 billion in 2013. This figure includes subsidies in the electricity sector, such as for coal-fired generators.
Established in 2005, IISD’s Global Subsidies Initiative is dedicated to analyzing subsidies – transfers of public money to private interests – and how they support or undermine efforts to achieve sustainable development. Its goal is to encourage individual governments to undertake unilateral reforms on subsidy policy.
For more information please contact Sumeep Bath, IISD media and communications officer, at [email protected] or +1 (204) 958 7740.
The International Institute for Sustainable Development (IISD) is an award-winning independent think tank working to accelerate solutions for a stable climate, sustainable resource management, and fair economies. Our work inspires better decisions and sparks meaningful action to help people and the planet thrive. We shine a light on what can be achieved when governments, businesses, non-profits, and communities come together. IISD’s staff of more than 200 experts come from across the globe and from many disciplines. With offices in Winnipeg, Geneva, Ottawa, and Toronto, our work affects lives in nearly 100 countries.
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