G20 leaders took an important step in agreeing to start phasing out fossil fuel subsidies, but they must work faster and more aggressively to mobilize all the financial tools we need to address climate change for the international summit in Copenhagen this December.
"The commitment of G20 nations to begin phasing out huge subsidies for fossil fuels is a significant step toward reducing carbon emissions," said Jennifer Haverkamp, Environmental Defense Fund's international climate policy team lead. "But it only works if the money they free up goes to address climate change."
"Government tax breaks and direct payments to coal, oil and other fossil fuel companies total as much as $300 billion each year worldwide. So fossil fuel subsidies are huge, but it's only part of the picture," said Haverkamp.
"Eliminating subsidies is only one element in a bigger package to get public and private finance flowing," said EDF's International Counsel Annie Petsonk. "That means cutting subsidies and it also means capping emissions because that's what shifts private finance to clean energy."
"G20 leaders, and especially President Obama, must show they have the political will to drive this deal home," said Petsonk.
According to the IEA's 2006 World Energy Report, global energy subsidies totaled $300 billion, with about 80 percent going to fossil fuels. The world's 20 largest non-OECD nations accounted for $220 billion in subsidies, while OECD nations accounted for $80 billion.
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