October 05, 2011
"Governments and taxpayers spent about half a trillion dollars last year supporting the production and consumption of fossil fuels. Removing inefficient subsidies would raise national revenues and reduce greenhouse-gas emissions," the IEA and Organization for Economic Co-operation and Development (OECD) said in a press release. Over half of the subsidies go towards oil.
Arguing that fossil fuel consumption subsidies often result in wasteful behavior from consumers, rather than development or poverty reduction, the IEA is asking both industrialized and developing nations to step-up. Only around 8 percent of the fossil fuel subsidies actually reach the world's poor.
The environmental impacts of fossil fuel subsidies are significant. The Green Economy Coalition has said these global subsidies are "[creating] false impressions about the relative cost of lower-carbon energy alternatives and this is bringing us closer to irreversible climate change."
Not all news from the report was bad. Speaking at a press conference, IEA's chief economist Fatih Birol, said several nations were making strides toward cutting fossil fuel subsidies, including 'significant efforts' by India, China, and Russia.
However, in many countries fossil fuel subsidies actually outweigh renewable energy subsidies. Between 2002 and 2008 the United States spent 72 billion dollars on fossil fuel subsidies, but only 29 billion dollars on renewable energy resources—nearly 17 billion dollars of which went to corn-based ethanol, an agricultural fuel that many environmentalists argue is not carbon-neutral and has been linked to deforestation and food crises.
The G20 comprises finance ministers and central bank governors from the EU, the US, China, Russia, the UK, India, Japan, Germany, France, Brazil, Australia, Canada, Saudi Arabia, Italy, Argentina, Mexico, South Korea, Turkey, Indonesia, and South Africa.
Half a trillion spent on fossil fuel subsidies mostly "a complete waste of money"
(04/22/2010) Despite a warming planet linked to the burning of fossil fuels, governments around the world still spend 500 billion US dollars a year subsidizing fossil fuel industries. A new study from the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development looks at the difficult political situation behind ending fossil fuel subsidies.
US provides 3 billion in subsidies for Exxon-mobil project in Papua New Guinea
(12/10/2009) While officials from around their world are working night-and-day to come up with an international agreement to combat climate change in Copenhagen, the US Export-Import Bank confirmed it will subsidize a natural gas project in Papua New Guinea to the tune of 3 billion dollars—a record for the bank.
Fossil fuel subsidies "bringing us closer to irreversible climate change"
(11/06/2009) The Green Economy Coalition is urging G20 finance ministers to rapidly put an end to fossil fuel subsidies. In a letter to the ministers the coalition argues that these subsidies are contributing directly to climate change and making it difficult for the world to transition to a greener economy.