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Taxpayers Still Shelling Out Billions Annually in Fossil Fuel Subsidies

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Paul Lowry / Flickr / CC BY 2.0

The world's richest countries continue to subsidize at least $100 billion a year in subsidies for the production and use of coal, oil and gas, despite repeated pledges to phase out fossil fuels by 2025.


The Group of Seven, or G7, consists of Canada, France, Germany, Italy, Japan, the UK and the U.S. The group, as well as the larger G20, agreed as early as 2009 to phase out fossil fuels in order to combat climate change.

But a new report from Britain's Overseas Development Institute (ODI) reveals that on average per year in 2015 and 2016, the G7 governments supplied at least $81 billion in fiscal support and $20 billion in public finance, for both production and consumption of oil, gas and coal at home and overseas.

"With less than seven years to meet their 2025 phase-out deadline, G7 governments continue to provide substantial support the production and use of oil, gas and coal," the authors stated.

The study, co-authored by Oil Change International, the International Institute for Sustainable Development and the Natural Resources Defense Council, was issued Monday ahead of the G7 summit in Canada.

"Governments often say they have no public resources to support the clean energy transition," the study's lead author Shelagh Whitley told the Thomson Reuters Foundation. "What we're trying to do is highlight that those resources are there (but) it is being used inefficiently."

For the study, each G7 member was rated on the following measures: transparency; pledges and commitments; ending support for fossil fuel exploration; ending support for coal mining; ending support for oil and gas production; ending support for fossil fuel-based power; and ending support for fossil fuel use.

France ranked the highest overall, with 63 out of 100 points. While the country is lagging behind in its support for fossil fuel use, France earned the top spot for making early progress in ending fossil fuel exploration and production and ending coal mining, the researchers determined. Germany (62 points) and Canada (54 points) rounded out the top three in the dubious list.

Unsurprisingly—due to President Donald Trump's intention to pull the U.S. out of the Paris agreement and his administration's unrelenting push of fossil fuels—the U.S. was ranked lowest on the list, scoring only 42 out of 100 points.

The report showed that the U.S. spent $26 billion a year supporting fossil fuels and scored the worst in ending support for coal mining, a pet project of President Trump.

"Despite their numerous commitments, 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 said.

The researchers urged the governments to establish concrete plans to end fossil fuel subsidies by 2025 as promised, Reuters reported.

"What should be a low-hanging fruit in terms of moving public resources away from fossil fuels is not happening, or where it is happening, it's not happening fast enough," Whitley told the news service.

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