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The world’s richest economies still subsidize their oil, gas, and coal use, investing more than US$100 billion annually in subsidies, a report from the Overseas development Institute has revealed.
The authors of the report tracked fossil fuel subsidies for the years 2015 and 2016, and found that on average, during each of these years, the governments of the G7 countries provided at least US$81 billion in fiscal support to the fossil fuel industry as well as another US$20 billion in public finances. The support included both production of oil, gas, and coal, and their use both at home and abroad.
Despite their numerous commitments,” the authors of the report note, “not only have G7 governments taken limited action to address fossil fuel subsidies but they have also failed to put in place any mechanisms to define and document the full extent of their support to oil, gas and coal, or to hold themselves accountable for achieving these pledges.”
The authors made individual scorecards for all members of G7, which showed that France was the best performer in the group, with an overall score of 63 out of 100, while the United States was last with an overall score of 42 out of 100. The authors rated each G7 members on things like transparency, climate change pledges and commitments, and ending support for oil, gas, and coal exploration, production and use for power generation, and other applications.
This state of affairs does not bode well for the Paris Agreement targets that many have already called unattainable even with stronger government support for climate change tackling initiatives.
The G7 governments agreed in 2009 to start phasing out fossil fuel subsidies and have them completely removed by 2025. There are less than seven years left until that deadline and things are not looking good, the ODI report authors noted. Even France, the leader in fossil fuel subsidy phase-out, still spends US$8 billion annually on them. The United States, on the other hands, splashes as much as US$26 billion annually to prop up fossil fuels.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.