WEALTHY Nations & Fossil-Fuel Subsidies
Members of the Group of 20 (G20) economies met in Beijing last week, but failed to reach an agreement on a deadline to phase out subsidies.
Environmental advocates believing eliminating fossil-fuel subsidies is crucial to lowering carbon emissions, because it will take away an artificial economic advantage currently enjoyed by the fossil-fuel industry.
Government officials in charge of some of the world’s most powerful economies also think that is the case.
The U.S. and China are pushing hard for an agreement on a deadline to phase out fossil-fuel subsidies, according to The Washington Post.
Saudi Arabia in particular has been an impediment to reductions in fossil fuel subsidies—although the country is reducing its own subsidies in anticipation of lower oil revenues in the future, Moniz noted.
At a separate June meeting, the U.S. and China agreed to push for a firm target to be set at a meeting of G20 leaders in Hangzhou in September.
The G20 economies subsidize fossil fuels to the tune of $444 billion a year, according to a 2015 report by British think tank Overseas Development Institute and Oil Change International.
That includes $23 billion per year spent by Russia, $20 billion by the U.S., and $3 billion by China, according to the report.
However, the International Monetary Fund said last year that the total cost of subsidies is actually $5.3 trillion, when the costs of dealing with the effects of climate change are factored in.
Paying to both subsidize the cost of fossil fuels and to deal with the effects of burning them puts a significant economic burden on world governments.
But the use of fossil fuels is proving a hard habit to break. As the G20 countries failed to take action on subsidies, Germany also abandoned its plans for a timetable to end the use of coal for electricity generation.
A version of the climate plan leaked in May included specific provisions to phase out coal power “well before 2050,” according to Reuters.
This original version reportedly met with heavy resistance from business groups, unions, and coal-producing regions of the country, all of whom claimed it would cost jobs.
Another proposal for an additional levy on gasoline and heating oil and gas was also cut from the revised document.
The current draft, due to be debated by the German cabinet in September, represents the latest strategy for meeting a government goal of reducing carbon-dioxide emissions by 95 percent from 1990 levels by 2050.