In 2011, the top 11 richest carbon emitters spent an estimated $74 billion on fossil fuel subsidies, or seven times the amount spent on fast-track climate financing to developing nations, according to a recent report by the Overseas Development Institute. Worldwide, nations spent over half a trillion dollars on fossil fuel subsidies in 2011 according to the International Energy Agency (IEA).
“The status quo encourages energy companies to continue burning high-carbon fossil fuels and offers no incentive to change,” said the report’s author Shelagh Whitley. “We’re throwing money at policies that are only going to make the problem worse in the long run by locking us into dangerous climate change.”
In 2009 at the Climate Summit in Copenhagen, governments around the world committed to keep global temperatures from rising 2 degrees Celsius above pre-industrial averages. However, four years later—with governments having made little progress to date towards that goal—fossil fuel subsidies remain one of the major stumbling blocks.
Fossil fuel subsidies take a variety of forms: in 2011 alone, the U.S. spent $1 billion on fuel tax exemption for farmers and another $1 billion on the strategic petroleum reserve; Germany gave $2.5 billion financial assistance to its coal industry; while the UK spent $447 million in tax concessions to the oil and gas industries. The wealthy nations that spent the most subsidizing fossil fuels included Russia, the U.S., Australia, Germany and the U.K.
While the EU has been lauded for putting a price on carbon, the price has been allowed to drop so low (less than $7 tonne) that fossil fuel subsidies on the continent may actually negate any benefit entirely, according to the report.
But subsidies aren’t just an issue in rich nations. According to the report, Bangladesh, India, Indonesia, Venezuela, Pakistan, and Egypt all spent more on fossil fuel subsidies than on health services. In some cases, nations spent twice or three times more on fossil fuel subsidies. Meanwhile, the governments of Bangladesh, Pakistan, and Nigeria spent more on fossil fuel subsidies than they received in foreign aid.
Vehicles work at night in the Tagebau Garzweiler coal surface mine in Germany. Photo by: CherryX/Creative Commons 3.0.
Such subsidies worldwide have actually put renewable energy on an unequal footing with fossil fuels, even as many governments pay lip service to the need to transition from fossil fuels to renewables.
“While many of the issues surrounding subsidies are enormously complex, one thing is relatively clear: subsidies create incentives to use fossil fuels, and disincentives to use resources efficiently and to invest in renewable energy,” reads the report. According to the IEA, for every dollar spent supporting renewable energy, governments spent $6 on fossil fuel subsidies.
“Coal, the most carbon-intensive fuel of all, is taxed less than any other source of energy and is, in some countries, actively subsidized,” says the report.
This summer G20 nations reiterated an agreement to phase out “inefficient” fossil fuel subsidies and set out a methodology to identify such subsidies. The commitment to phase out fossil fuel subsidies was first made by G20 nations in 2009, but progress has been slow.
“It has been hard to reach an agreement because subsidies touch directly on issues of government sovereignty, trade competition and poverty alleviation,” reads the report, adding that lack of data “across countries inhibits even the very first proposed step of subsidy phase-out: the analysis of the costs and distortions that subsidies impose on the economy.”
Governments have long argued that energy subsidies—including the bulk of those which are aimed at fossil fuels—are meant to keep costs down for consumers and especially help the poor. The debate over poverty and fossil fuel subsidies is especially important in developing countries. However, research shows that little of the subsidies actually assist the poorest. According to the International Monetary Foundation (IMF) only 7 percent of subsidies in the world’s developing countries actually goes to the bottom 20 percent in income.
The report recommends that nation’s phase out all fossil fuel subsidies by 2025 with G20 nations taking the lead and cutting out fossil fuel subsidies by 2020.
Exclusive: Stunning aerial photos reveal Ecuador building roads deeper into richest rainforest on Earth (Yasuní National Park)
(11/12/2013) In August 2012, professional photographers Ivan Kashinsky and Karla Gachet were on assignment for National Geographic in Yasuní National Park, home to arguably the most biodiverse rainforest in the world. While there, they happened to take an aerial shoot above an area known as Block 31 (see Map), a controversial oil concession located in the heart of the park, at the precise moment that the national oil company, Petroamazonas, was secretly building a new oil access road.
Bangladesh plans massive coal plant in world’s biggest mangrove forest
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Bay Area pledges to slash greenhouse gas emissions by 80 percent by 2050
(11/11/2013) While many of the world’s national governments move tepidly (if at all) to combat climate change, cities are showing increasing leadership. The San Francisco Bay Area’s Air District Board signed off last week on a measure to cut greenhouse gas emissions by 80 percent within less than 40 years time as based on 1990 levels. The measure follows the same goal as an executive order made by California governor, Arnold Schwarzenegger, in 2005.
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(10/31/2013) Global carbon dioxide emissions hit another new record of 34.5 billion tons last year, according to a new report by the Netherlands Environment Assessment Agency and the European Commission’s Joint Research Centre, but there may be a silver lining. Dubbing 2012 a “remarkable year,” the report found that the rate of carbon emission’s rise slowed considerably even as economic growth continued upward.
(10/28/2013) China’s largest city and one of the world’s biggest, Shanghai, is set to ban coal burning in just four years, according to a new Clean Air Action Plan. The city-wide ban on coal burning is one effort among many to get Shanghai’s infamous smog under control as well as another sign that China has begun to take its pollution problems more seriously.
WHO: air pollution causes cancer
(10/17/2013) Outdoor air pollution has been officially classified as carcinogenic by the cancer arm of the World Health Organization. The International Agency for Research on Cancer (IARC) said air pollution from traffic and industrial fumes was a definite cause of lung cancer and also linked to bladder cancer. The strong verdict from IARC, a cautious body that pronounces only when the evidence is strong, will put pressure on governments to take action.
Map reveals gas company flying over Manu National Park
(10/17/2013) A map in an internal Peruvian government report reveals that gas company Pluspetrol has been flying over the protected Manu National Park (MNP) in the south-eastern Peruvian Amazon where UNESCO says the biodiversity “exceeds that of any other place on earth.”
The over-flight was done via helicopter on 3 February, 2012 by Pluspetrol personnel together with a team from the National Institute e Development of Andean, Amazonian and Afroperuvian Peoples (INDEPA).
France upholds nationwide ban on fracking
(10/14/2013) France’s landmark ban on fracking has survived constitutional challenges lobbed by U.S.-company, Schuepbach Energy. On Friday, the nation’s Constitutional Council decided that the ban did not violate France’s constitution. Passed in 2011 under then President Nicolas Sarkozy, the ban has since been upheld by current President Francios Hollande.
Divestment campaign could cause considerable damage to fossil fuel industry
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