Fossil fuel subsidies ‘inconsistent’ with low-carbon future

By subsidising fossil fuels, the world’s leading economies are “artificially suppressing clean energy” and bringing the world “closer to irreversible and catastrophic climate change,” members of the Green Economy Coalition wrote today in a letter to ministers of finance for G-20 countries.

The letter (pdf) praised the G-20 for last September committing to a medium-term phase-out of fossil fuel subsidies that “encourage wasteful consumption,” and added a list of five recommendations for finance ministers:

1. Agree to standardised and regular reporting of current fossil fuel subsidies to make good on the G-20’s promise of full disclosure;
2. Work with the international community to research both the impact of existing subsidies and likely consequences of reform on the economy, the environment and social welfare;
3. Develop plans with clear timeframes for reform;
4. Enlist the help of the international community to develop subsidy reform packages with extensive input from stakeholders, comprehensive communication and measures to cushion the negative effects of reform on the poor; and
5. Establish a peer review verification process to track progress of the implementation plans against commitments.

“Unlike many other subsidies, those to fossil fuels are a world-wide problem,” the letter states. “Whereas it is principally the developing world which grants low fuel prices to consumers, various more subtle subsidies are used to reduce the costs of producing and refining fossil fuels in all countries — developed and developing.”

Subsidising fossil fuels also wastes money that could be better spent in other areas, and contradicts efforts to promote low-carbon development, the letter adds.

“It is inconsistent for governments to finance carbon reduction policies whilst simultaneously increasing fossil fuel consumption through subsidies,” it states.

Among those signing the letter are James P. Leape, director general of WWF International; Joost Martens, director general of Consumers International; Julia Marton-Lefèvre, director general of the International Union for Conservation of Nature; and Camilla Toulmin, director of the International Institute for Environment and Development.

Related posts:

1. UK must go on “fossil fuel diet” to meet CO2 targets
2. Biofuel subsidies a ‘waste of money’
3. The ‘hidden’ costs of fossil fuels? $120 billion in US alone