At a meeting this week in Washington, fossil fuel subsidies should be prioritised in the discussion, so that renewable energy sources can at last be fully exploited, writes Maeve McLynn.
Maeve McLynn is climate and development policy coordinator at Climate Action Network Europe
This week, finance ministers from the world’s 20 most powerful economies will gather in the US capital to discuss pressing problems related to our global financial system, including barriers to green finance and options to increase private green investment.
The unbalanced and favourable support for polluting fuels, otherwise known as fossil fuel subsidies, should be put in the spotlight of this discussion. This has proven to be one of the biggest obstacles to green energy investments, obscuring the real costs of fossil fuels and thus slowing down the deployment of renewable energy and progress on reducing energy consumption.
In 2009, G20 leaders highlighted the need to tackle fossil fuel subsidies. But in the years since, they have demonstrated a lacklustre attitude towards effective action to eliminate them. Despite the countless declarations to phase out fossil fuel subsidies, the balance books of governments speak a different language.
Fossil fuel subsidies are still here, and to a great cost to us. It really beggars belief that the reported figure for financial support to fossil fuels in G20 countries last year was nearly €400 billion.
It is not only the direct public spending and tax breaks that count. In addition to the costs mentioned above, our taxes keep propping up an industry that is responsible for costs resulting from hundreds of thousands of health-related illnesses and deaths, climate-related catastrophes and the displacement of people and communities all over the world.
Understandably, questions arise as to why a shift of public finance away from fossil fuels is not more speedily underway. It can be put down to many factors. First, financial support comes in many forms and through various means, making the complete elimination of subsidies quite a momentous task. Moreover, there is little transparency on the extent to which our governments fund fossil fuel production and consumption. The main hurdle to eliminating financial support for polluting industries is the ongoing lack of political will amongst our leaders, prompted by the strong counter-lobbying by an industry that does not want to lose its benefits.
After all, fossil fuel companies have crafted their way to becoming a relentless force, investing a great deal of money and human resources into influencing our decision-makers. They have also been misleading public opinion to suit their agenda and remain almost free from public scrutiny. All in a bid to justify their existence and keep receiving public money and continue polluting.
Examples abound. Just last month, the UK government gifted the fossil fuel sector with a tax break of over €1.25 billion for their operations in the North Sea. This move comes despite the countless arguments that such tax breaks are neither economically, nor environmentally sound.
This money could be much better spent on social and environmental needs within our economies; billions of euros could be shifted to green energy projects, but also to schools, hospitals and vulnerable people affected by climate change.
It is time for concrete action. The agreement adopted at the UN Climate Summit in Paris last December should drive our economies away from their dependence on fossil fuels. The agreement should spur G20 governments to effectively and quickly remove all barriers that slow down the shift towards a low-carbon economy, putting an end to their fossil fuel subsidies talk shop.
G20 leaders need to set down a deadline for phasing out fossil fuel subsidies, as well as committing to eliminating support for oil, coal and gas no later than 2020. They also need to support a fair and equitable transition to renewable energy. The meeting later this week should start this process.
In the wake of COP21, the time has come to end the benefits to polluters and incite a transition that finally benefits people.