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Record amounts of money are still flowing into fossil fuel subsidies two years after the world’s top economies pledged to cut them. In 2021, the UK, together with key partner Italy, hosted the COP26 climate summit, an event many believed to be the world’s best last chance to get runaway climate change under control. A key outcome of the summit was that dozens of nations pledged to end deforestation, curb CO2 and methane emissions and also stop public investment in coal power.
Two years later, all those promises have gone to the dogs, with developed countries spending huge amounts of public money funds on fossil fuels. According to the International Institute for Sustainable Development (IISD), a thinktank, G20 countries spent a record $1.4tn(£1.1tn) through 2022 on coal, oil and gas.
“These figures are a stark reminder of the massive amounts of public money G20 governments continue to pour into fossil fuels--despite the increasingly devastating impacts of climate change,” Tara Laan, a senior associate with the IISD and lead author of the study, has said.
Specifically regarding coal, a total of 46 countries signed the Global Coal to Clean Power Transition statement, promising to “accelerate a transition away from unabated coal power generation” and “cease issuance of new permits for new unabated coal-fired power generation projects.”
However, according to a report by the Observer Research Foundation, energy supply disruptions triggered by Russia’s war on Ukraine took LNG prices even higher, leaving coal as the only option for dispatchable and affordable power in much of Europe, including the tough markets of Western Europe and North America that have explicit policies to phase out coal.
Coal mines and power plants that had closed 10 years ago began to be repaired in Germany and other European countries in what industry observers dubbed a “spring” for Germany’s coal-fired power plants That’s a big U-turn considering that Germany's goal had been to phase out all coal-generated electricity by 2038. Other European countries such as Austria, Poland, the Netherlands and Greece have also restarted mothballed coal plants.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.