New research shows that governments in the G20 group of the world’s major economies are subsidising production of fossil fuels (oil, gas and coal), when much of it cannot be used if the world is to avoid dangerous climate change.
The Empty Promises report from the Overseas Development Institute details the scale and structure of fossil fuel subsidies in the G20 countries. The evidence points to a publicly financed bailout for some of the world’s largest, most carbon-intensive and polluting companies.
G20 countries are creating a ‘lose-lose’ scenario by directing large volumes of finance into high-carbon assets that cannot be exploited without catastrophic climate effects. This diverts investment from economic low-carbon alternatives such as solar, wind and hydro-power. The scale of G20 fossil fuel production subsidies calls into question the commitment of governments to an ambitious deal on climate change.
ODI report that: “The UK stands out as a major industrialised economy that has dramatically increased its support to fossil fuels in recent years. While other nations have responded to the drop in energy prices by reducing fossil fuel consumer subsidies, the UK has reduced taxes on fossil fuel production, increasing subsidies to fossil fuel producers. Many of the changes to the UK’s tax regime for oil and gas are recent and will not come into effect until 2015 or later.“