G-20 providing $452 bln a year on fossil fuel production subsidies despite pledge to remove them: Report
REUTERS photoG-20 governments are handing out approximately $452 billion a year to prop up the production of fossil fuels – despite pledges to phase out subsidies and prevent catastrophic climate change.
A new report by the Overseas Development Institute and Oil Change International has for the first time gathered detailed information on G20 subsidies to oil, gas and coal production.
In the report, “Empty Promises: G-20 subsidies to oil, gas and coal production,” researchers found G-20 support to fossil fuel production alone ($452 billion) was almost four times the entire global subsidies for renewable energy ($121 billion).
This support comes despite the global imperatives to keep three quarters of current fossil fuel reserves in the ground and declining returns in coal and new hard-to-reach oil and gas reserves.
The report, published ahead of the G-20 summit in Antalya, Turkey, examines three types of G-20 government support in 2013 and 2014 – the most recent years with comparable data. It looks at national subsidies extended through direct spending and tax breaks; investment by state-owned enterprises both domestically and internationally; and public finance extended through – for example - loans from government-owned banks and financial institutions.
G-20 governments provided almost $78 billion a year in national subsidies for fossil fuel production; G-20 state-owned enterprises invested $286 billion, and public finance was estimated to average a further $88 billion a year in 2013 and 2014, according to the report.
Japan provided more public finance for fossil fuel production in 2013 and 2014 than any other G-20 country, averaging $19 billion per year, with $2.8 billion per year in coal finance alone.
Turkey to raise greenhouse gas emissions by ’94 pct’
Turkey – G-20 host - is giving tax breaks to support its program of building more coal plants than any other OECD country potentially raising its own greenhouse gas emissions by 94 percent over the next 15 years, said the report.
Russia provided almost $23 billion in national subsidies, the highest of all G-20 countries, according to the report.
The United Kingdom stands out as the only G-7 nation significantly ramping up its support for the fossil fuel industry, with even more tax breaks and industry support handed out to companies operating in the North Sea in 2015, said the report.
The United States provided more than $20 billion in national subsidies alone, despite calls from President Barack Obama to scrap support to oil, gas and coal. Certain tax breaks in Alaska are so significant that, in the case of one production tax, the state is handing out more to companies than the tax generates in revenue for the state, added the report.
Australia and Brazil both provided approximately $5 billion in national subsidies, including for development of fossil fuel resources in increasingly remote and challenging areas, it said.
“G-20 governments are paying fossil fuel producers to undermine their own policies on climate change.
Scrapping these subsidies would rebalance energy markets and allow a level playing field for clean and efficient alternatives,” said Shelagh Whitley, of the Overseas Development Institute.
At the end of September 2015, the U.S. and China jointly prioritized the establishment of a concrete deadline for the phase-out of fossil fuel subsidies as a key task during China’s G-20 presidency in 2016.
In line with this momentum, the report recommends G-20 governments adopt strict timelines for the phase out of fossil fuel production subsidies, increase transparency through improved reporting of fossil fuel subsidies, and transfer government support to wider public goods including low-carbon development and universal energy access.
“Continuing to fund the fossil fuel industry today is like accelerating towards a wall that we can clearly see. G-20 leaders need to slow down and turn us around before we hit climate disaster,” said Stephen Kretzmann, director of Oil Change International.
The G-20 Leaders’ Summit is to be held on November 15-16, 2015, in the Mediterranean resort of Antalya.