G20 spend $452 bn a year subsidising fossil fuel production, four times global spending on renewable energy subsidies
TORONTO, Nov 12 (Thomson Reuters Foundation) - G20 members are spending $452 billion a year subsidising fossil fuel production - nearly four times global spending on renewable energy subsidies - despite pledging to phase out fossil fuel support to tackle climate change, a new report said on Thursday.
Global subsidies for renewable energy production amount to just $121 billion a year, the Overseas Development Institute (ODI), a UK-based think-tank, and research group Oil Change International said in their report.
The much greater support given to fossil fuels than to clean energy technologies by the G20, the world's biggest economies, makes it harder to cut greenhouse gas emissions and slow climate change, said the report issued before the G20 summit in Antalya, Turkey, on Nov. 15-16.
"G20 governments are paying fossil fuel producers to undermine their own policies on climate change," the ODI's Shelagh Whitley said in a statement.
"Scrapping these subsidies would rebalance energy markets and allow a level playing field for clean and efficient alternatives."
G20 countries backed calls to phase out fossil fuel subsidies at meetings in 2009 and 2014, but are not making significant progress, the report said.
G20 governments should adopt strict timelines for phasing out fossil fuel subsidies and transfer government financial support to greener forms of energy, it said.
Subsidies to oil and coal producers include direct payments such as grants, loans and equity, tax credits, and price supports, according to the World Trade Organization (WTO).
The report said money provided by G20 governments for fossil fuel production in 2013 and 2014 included nearly $78 billion a year in national subsidies, state-owned company investments of $286 billion, and other public finance support valued at $88 billion.
Russia had the highest national subsidies among the G20, providing almost $23 billion.
The United Kingdom was the only G7 nation to significantly increase support for its fossil fuel industry, providing more tax breaks and industry support in 2015 for companies extracting oil from the North Sea - whose oilfields are in decline.
Australia and Brazil each provided national subsidies of about $5 billion, including handouts for companies looking to extract fossil fuels from hard-to-reach areas.
Despite calls by U.S. President Barack Obama to scrap fossil fuel subsidies, the world's largest economy spent more than $20 billion in national subsidies, the report said.
Investments in fossil fuel extraction by Chinese state-owned firms were the largest of any G20 country, amounting to nearly $77 billion annually.
Turkey, the G20 summit host, is giving tax breaks to support its programme of building more coal-fired plants than any other OECD country, potentially raising its greenhouse gas emissions by 94 percent over the next 15 years.
Three-quarters of all proven reserves of oil, gas and coal must stay in the ground to give the world a two-in-three chance of keeping global temperatures from rising by more than 2 degrees centigrade, the threshold for major climate change, the Intergovernmental Panel on Climate Change (IPCC) said last year.
(Reporting By Chris Arsenault, editing by Tim Pearce. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit www.trust.org)
Our Standards: The Thomson Reuters Trust Principles.