G20 countries have provided more than $ 3.3 billion (£ 2.4 billion) in fossil fuel subsidies since the signing of the Paris climate agreement in 2015, according to a report, despite the commitment of many to fight against the crisis.
This support for coal, oil and gas is “reckless” in the face of the escalating climate emergency, according to the report’s authors, and urgent action is needed to phase out this support. The $ 3.3 billion could have built solar power plants equivalent to three times the U.S. electricity grid, according to the report.
The G20 countries account for nearly three quarters of the global carbon emissions that cause global warming.
The report, written by BloombergNEF and Bloomberg Philanthropies, focuses on three areas where immediate action is needed to limit the global temperature rise to 1.5 ° C: ending fossil fuel subsidies, putting a price on carbon emissions and forcing companies to disclose the risks of climate change to their businesses.
The report says 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 declined 2% per year from 2015 to reach $ 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 that from the United States by 37%. UK subsidies fell 18% during this period, 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 subsidies to “inefficient” fossil fuels, but did not define inefficiency and little progress has been made.
“On paper, world leaders and governments recognize the urgency of the climate challenge and the G20 countries have all made ambitious commitments to reduce fossil fuel development and the transition to a low carbon economy,” said said Antha Williams, environmental manager at Bloomberg. Philanthropy.
“But, in reality, the measures taken by these countries so far fall short of what is needed. As a multitude of climate emergencies intensify around the world, the continued development of fossil fuel infrastructure is simply unwise. We need more than 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 represents more than $ 6.6 billion in investments both urged governments to act ahead of a G20 meeting. energy and climate ministers in Italy on Friday.
“New [commitments] and the net zero targets of some G20 countries are welcome, ”said Günther Thallinger, of financial services company Allianz and chairman 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 producing fossil fuels and 40% to reduced prices for energy consumers.
“This funding really encourages the potentially unnecessary production and use of fossil fuels and may mean that emission-intensive assets are funded today, blocking their emissions for decades,” said Vicky Cuming of BloombergNEF and author of the report.
“There is evidence that [subsidies] disproportionately benefit the wealthiest consumers, rather than vulnerable groups, ”she said. the yellow vests The (yellow vests) protests in France in 2018 showed that reducing fuel subsidies was politically sensitive, she said.
Experts say protecting the less well-off consumers from such changes is crucial for the success of policies.
The report also looked at how G20 countries put 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 CO2. Only 8% of US emissions are hedged and at the low price of $ 6 per tonne. Russia, Brazil and India do not have carbon prices.
Forcing companies to disclose the risks the climate crisis poses to their businesses is essential for financial markets to divert capital from polluting sectors to green sectors, the report says. But only the UK and the EU have said they will implement such a policy.
A recent report by the International Institute for Sustainable Development concluded that reforming fossil fuel subsidies for consumers in 32 countries could reduce CO emissions2 by 5.5 billion tonnes by 2030, equivalent to the annual emissions of approximately 1,000 coal-fired power plants. He said the changes would also save governments nearly $ 3 billion by 2030.
In June, more than 500 organizations called on U.S. policymakers to remove fossil fuel subsidies from the U.S. tax code. “It is high time to take the burden off the public of supporting dirty energy and instead devote government efforts to supporting clean energy and the jobs it generates,” the letter said.