Taxpayers worldwide are subsidizing fossil fuel companies. Research discovers that G20 country governments’ support to fossil fuel production marries bad economics with potentially disastrous consequences for climate change. In effect, governments are propping up the production of oil, gas and coal, much of which cannot be used if the world is to avoid dangerous climate change. The report Empty promises: G20 subsidies to oil, gas and coal production documents, for the first time, the scale and structure of fossil fuel production subsidies in the G20 countries. The evidence points to a publicly financed bailout for some of the world’s largest, most carbon-intensive and polluting companies. It finds that, by providing subsidies for fossil fuel production, the G20 countries are creating a ‘lose-lose’ scenario. They are directing large volumes of finance into high-carbon assets that cannot be exploited without catastrophic climate effects. This diverts investment from economic low-carbon alternatives such as solar, wind and hydro-power. In addition, the scale of G20 fossil fuel production subsidies calls into question the commitment of governments to an ambitious deal on climate change. (Source)
A highly misleading anti-cleantech talking point is that renewable energy “relies on government subsidies,” and that all of the renewable energy growth in recent years is attributable to them. In actuality, fossil fuels and nuclear power have been receiving government support for much longer than renewable energy has. And these dirty energy options continue to receive a tremendous amount of government support even though they are overripe industries in many regards. In the United States alone, the petroleum and coal industries receive at minimum about $20 billion a year in various forms of financial support. The US coal industry has also received considerable government support dating to 1932! One analysis came up with a total figure of at least $70 billion, and that was only for the last 60-some years. (Source)
At every summit since 2009, the G7 has committed to a phase out of fossil fuel subsidies, and in 2016, agreed to do so by a deadline of 2025. Unfortunately, there has been limited action to address subsidies. In addition, there are limited mechanisms put in place for defining and documenting the full extent of these government subsidies and for holding countries accountable for achieving their pledges. Key country-specific findings from the report ranks France high thanks to progress in phasing out support – the United States ranked last on progress in removing them due to the massive amount of subsidies, as well as for backtracking on previous pledges to end support to fossil fuels. (Source) Early in 2017, investors and insurers with more than $2.8 trillion in assets under management called on the G20 economies to phase out fossil fuel subsidies by 2020 despite U.S. doubts about climate change. (Source)
Some reports on giveaways to energy corporations:
A new study finds 6.5% of global GDP goes to subsidizing dirty fossil fuels – that’s $5 trillion a year – source
World’s largest banks lent $87bn to oil, coal and LNG companies in 2016 – source
Through the US Export-Import Bank, Barack Obama’s administration has spent nearly $34bn supporting 70 fossil fuel projects around the world – source