G20 governments still heavily investing in fossil fuel subsidies
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G20 governments are still heavily subsidising the fossil fuel industry despite repeated pledges to focus efforts on green initiatives instead.
Monetary support for the sector has dropped by only 9 per cent since 2014-2016 levels, hitting $584bn (£451bn) annually over the last three years, a joint study from the International Institute for Sustainable Development (IISD), the Overseas Development Institute (ODI) and Oil Change International (OCI) has found.
The authors write that the marginal progress that has been made will likely be undone this year by billions of dollars committed to fossil fuels in response to Covid-19.
“G20 governments were already not on track to meet their Paris Agreement commitments on ending public support for fossil fuels before Covid-19,” said lead author Anna Geddes, IISD.
“Now, disappointingly, they are moving in the opposite direction. G20 funds for fossil fuels are likely on course to remain constant or even trend upwards again in 2020 compared to the last few years where we’ve seen a slight drop in support.”
According to the latest data from the Energy Policy Tracker, G20 governments have given at least £233bn in additional support through recovery measures to fossil fuel-intensive sectors since the pandemic began.
The researchers looked at seven indicators: transparency, pledges, public money for coal, oil and gas, fossil fuel-based power (both production and consumption), as well as how support has changed over time.
In most countries assessed, the progress made during the last three years was described by experts as “poor” or “very poor” and no country was considered to have made “good progress” in line with reaching Paris Agreement goals.
Among the G20 Organisation for Economic Co-operation and Development (OECD) members, Germany performed best overall in terms of phasing out fossil fuel funding, while Mexico, Turkey and the UK ranked equal-lowest. Out of the non-OECD G20 countries, Brazil scored highest, while Saudi Arabia came in last.
Top scorer Germany got points for transparency, strong commitments and relatively lower support for oil and gas production and fossil fuel use.
The country’s overall support to fossil fuels dropped 35 per cent relative to 2014–2016. Brazil’s relatively good performance was tied to low support for coal production, fossil fuel-based power and consumption, and a reduction in state-owned enterprise investment in fossils. However, the report finds that new measures under consideration could soon reverse this progress.
On the other end of the spectrum, the UK and Turkey rank poorly due to a lack of transparency and large subsidies for fossil fuel use, while Mexico was docked for heavy support for oil and gas production and fossil fuel-based power.
Saudi Arabia also continues to heavily support oil and gas production and fossil fuel-based power, mostly through large state-owned enterprise expenditures and low consumer energy prices, the researchers report.
“No G20 country is performing as it should, but there are some examples that could be followed,” said Angela Picciariello of ODI.
“A true leader would mirror Germany’s transparency and strong pledges and go a step further than Italy with a plan to rapidly phase out not only support for coal but also oil and gas. To be in line with 1.5° Celsius and avoid the worst of the climate crisis, G20 governments should rule out any continued fossil fuel support, in recovery spending or otherwise.”
Last week, climate-sceptic and right-wing Republican Donald Trump lost his presidential re-election bid against Democrat challenger Joe Biden, who has vowed that the US will re-join the Paris Agreement - which it only formally left last Wednesday, 4 November - on day one of his administration.
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