G20 countries have provided more than $ 3.3 trillion (£ 2.4 trillion) in fossil fuel subsidies since the Paris climate agreement was sealed in 2015, a report shows, despite many pledging to address the crisis.
This backing for coal, oil and gas is “reckless” in the face of the growing climate emergency, according to the report’s authors, and urgent action is needed to remove the support. The $ 3.3 trillion could have built solar plants equivalent to three times the US power grid, the report says.
The G20 countries account for nearly three-quarters of the global carbon emissions that drive global warming.
The report, by BloombergNEF and Bloomberg Philanthropies, focuses on three areas where immediate action is needed to limit the global temperature rise to 1.5 ° C: end fossil fuel subsidies, put a price to carbon emissions and make companies disclose the risks that climate change poses for their companies. Business.
The report says that the 19 G20 member states continue to provide substantial financial support for the production and consumption of fossil fuels; the EU bloc is the 20th member. Overall, subsidies fell 2% annually from 2015 to $ 636 billion in 2019, the latest data available.
But Australia increased its fossil fuel subsidies by 48% over the period, support from Canada increased by 40% and support from the United States by 37%. UK subsidies fell 18% during that time, but still stood at $ 17 billion in 2019, according to the report. The largest subsidies came from China, Saudi Arabia, Russia and India, which together accounted for about half of all subsidies.
The G20 agreed in 2009 to phase out “inefficient” fossil fuel subsidies, but did not define ineffectiveness and little progress had been made.
“On paper, world leaders and governments are recognizing the urgency of the climate challenge and the G20 countries have made ambitious commitments to reduce fossil fuel development and the transition to a low-carbon economy,” said Antha Williams, Director Bloomberg Environmental Policy. Philanthropy.
“But in reality, the action taken by these countries so far is far from what is needed. As a series of climate emergencies intensify around the world, the continued development of fossil fuel infrastructure is nothing short of reckless. We need more than just words, we need action. “
UN Special Envoy for Climate Michael Bloomberg, founder of Bloomberg Philanthropies, and the UN-backed Net-Zero Asset Owner Alliance (NZAOA), which accounts for more than $ 6.6 trillion of investments, both urged the governments to act, before a G20 meeting. energy and climate ministers in Italy on Friday.
“New [commitments] and the net zero targets of some G20 countries are a warm welcome, “said Günther Thallinger of financial services firm Allianz and president of NZAOA. “However, promises and goals alone will not be enough to change course.”
The report found that 60% of fossil fuel subsidies went to companies that produce fossil fuels and 40% to lower prices for energy consumers.
“This funding really encourages the potentially wasteful production and use of fossil fuels and may mean that emissions-intensive assets are funded today, thereby blocking their emissions for decades,” said Vicky Cuming on BloombergNEF and author of the report.
“There is evidence that [subsidies] they disproportionately benefit wealthier consumers, rather than vulnerable groups, ”he said. The yellow vests The (yellow vest) protests in France in 2018 showed that cutting fuel subsidies was politically sensitive, he said.
Experts say ensuring that less well-off consumers are protected from such changes is crucial for policies to be successful.
The report also examined how the G20 countries were putting a price on carbon pollution. It found that more than 80% of emissions were covered by such prices in France, Germany and South Africa.
In the UK, 31% of emissions are covered, but the UK has one of the highest carbon prices at $ 58 per tonne of COtwo. Only 8% of US emissions are covered and at the low price of $ 6 per ton. Russia, Brazil and India do not have carbon prices.
The report says that getting companies to disclose the risks that the climate crisis poses to their businesses is critical to enabling financial markets to shift capital away from polluting sectors and into green sectors. But only the UK and the EU have said they will enforce such a policy.
A recent report of the International Institute for Sustainable Development concluded that reforming consumer fossil fuel subsidies in 32 countries could reduce COtwo by 5.5 billion tonnes by 2030, equivalent to the annual emissions of about 1,000 coal-fired power plants. He said these changes would also save governments nearly $ 3 trillion by 2030.
In June, more than 500 organizations called on US lawmakers to remove fossil fuel subsidies from the US Tax Code “It is time to remove the burden of supporting dirty energy from the public and instead turn government efforts to support clean energy and the jobs it creates,” the letter says.
George is Digismak’s reported cum editor with 13 years of experience in Journalism