G20 Countries Spent a Record $1.4 Trillion in Fossil Fuel Subsidies!
The 18th G20 Leaders' Summit is almost approaching, yet a recent IISD analysis showed that G20 countries spent $1.4 trillion on subsidies for fossil fuels in 2019, breaking their climate obligations. As investments in renewable energy lag, suggestions include a carbon fee to finance green transformations.
G20 countries $1.4 Trillion Spending Revealed in IISD Report, Despite Glasgow Pledges
The 18th G20 Leaders’ Summit is around the corner, and a recently released report revealed that the member nations of the G20 have spent $1.4 trillion on fossil fuel subsidies in the previous year. The International Institute for Sustainable Development (IISD) released a report on August 23 titled “Fanning the Flames: G20 provides record financial support for fossil fuels” that revealed that G20 members had spent $ 1.4 trillion of public funds to support fossil fuels as recently as 2019.
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This amount was more than twice what they had spent prior to COVID-19 and the energy crisis. Support for fossil fuels runs contrary to commitments that nations have made to phase them out in accordance with several international climate agreements, particularly one signed by the G20 in 2009.
A number of recommendations were also made to the G20 in the study, including the advantages of imposing a carbon price to encourage investors and consumers to stop using and funding fossil fuels. According to their estimation, such a tax might generate up to US $1 trillion a year and aid in funding social welfare programmes and just transitions.
The analysis revealed that although global investment in renewable energy hit a record high of US $ 500 billion in 2022, it was still only about half as much as that in fossil fuels (US $ 950 billion). While the G20 announced US $ 265 billion in subsidies for the production of renewable energy between 2020 and June 2023, the subsidies for the production of fossil fuels were much higher, totalling almost US $ 1.4 trillion from 2020 to 2022.
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The report advises the G20 nations to fulfil their climate obligations by stopping all public financial flows to fossil fuels, with the exception of those required to give the world’s poorest people access to energy.
A World Bank research published in June stated that “by underpricing fossil fuels, governments not only encourage overuse but also sustain ineffective, polluting technologies and entrench inequality.”
The report’s authors also pointed out that around three-quarters of all energy sector subsidies go to fossil fuels.
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