G20 Foundation Publications Turkey 2015

116 CLIMATE CHANGE & SUSTAINABILITY FOSSIL FUEL SUBSIDIES, CLIMATE CHANGE AND THE G20 Peter Wooders, Group Director Energy, International Institute for Sustainable Development Addis Ababa, and in the United Nations Sustainable Development Goals. lobally, consumer subsidies to fossil fuels stood at USD 548 billion in 2013 (International Energy Agency [IEA], 2014). More recent data from the Organisation for Economic Co-operation and Development (OECD) finds that the 34 OECD countries and emerging economies (Brazil, China, India, Indonesia, Russia and South Africa) are spending between USD 160– 200 billion supporting fossil fuel consumption and production. This inventory covers all G20 countries and more, with the exception of Saudi Arabia and South Korea. The Secretary General of the OECD, Angel Gurría, put it succinctly: “Governments are spending almost twice as much money supporting fossil fuels as is needed to meet the climate-finance objectives set by the international community, which call for mobilizing 100 billion US dollars a year by 2020” (qtd. in “OECD: leading countries,” 2015). Research from a GSI study of Turkey—host of the 2015 G20 summit—found spending of more than USD 730 million on annual subsidies to the coal industry (Acar, Kitson, & Bridle, 2015). In 2009 the G20 countries agreed “To phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest” (G20, 2009). Since then, G20 governments have reconfirmed commitments to this action five times over—most recently, in Australia in November 2014 (G20, 2014a)—and reiterated in the G20 Principles on Energy Collaboration (G20, 2014b). This year has seen wording on the issue included as a Means of Implementation, linked to financing, in other international statements such as the Financing for Development conference in The future is clear. But what is needed now is action and leadership from the G20 to dismantle subsidies to fossil fuels to both consumers and producers— and reinvest the resulting savings into the low-carbon energy transition. Leadership is needed now more than ever in the context of both low oil prices and the efforts to build a new climate agreement in Paris at the end of 2015. This leadership may come, but too late for this year. A recent U.S. statement supports China’s 2016 presidency of the G20 and commits to work to “phasing out inefficient fossil fuel subsidies by a date certain” (Office of the Press Secretary, 2015). A timetable for phase out is now needed. Even in China, recent GSI research found consumer and producer subsidies for coal to be around USD 15.7 billion in 2013 (Bridle, Gerasimchuk and Attwood, 2015). Q

G20 Foundation Publications Turkey 2015 | Page 116