Quantcast

World's Richest Countries Spent $500 Billion on Fossil Fuel Subsidies

Business

The nations with the biggest economies seem to spend the largest amounts on subsidies to fossil fuel companies.

The International Energy Agency (IEA) estimates that $523 billion in subsidies went to fossil fuel companies across the world in 2011, according to a report released today by the Overseas Development Institute (ODI), a global development think tank. G-20 countries, including the U.S., China and Japan, spend an average of $112 per adult on fossil fuel subsidies.

ODI estimates that only $1 was spent on renewable energy for every $6 spent on fossil fuel subsidies in 2011.

Graphic credit: Overseas Development Institute

"The rules of the game are currently biased in favor of fossil fuels," said Shelagh Whitley of ODI, who wrote the report. "The status quo encourages energy companies to continue burning high-carbon fossil fuels and offers no incentive to change. We’re throwing money at policies that are only going to make the problem worse in the long run by locking us into dangerous climate change."

The E11, defined by ODI as the top 11 rich-country emitters—Australia, Canada, France, Germany, Japan, Italy, Poland, Russia, Spain, United Kingdom and U.S.—spent $74 billion on subsidies in 2011, according to the report.

Graphic credit: Overseas Development Institute

Whitley points out that G20 countries committed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption," according to a report following the 2009 G20 Summit in Pittsburgh, PA. Various subgroups of those countries recapitulated that commitment at least three times since then, though a 2012 study deemed the reporting of fossil fuel subsidies to be spotty.

Whitley says the powerful nations never came to a consensus on what constitutes a fossil fuel subsidy; a framework for G20 subsidy tracking and reporting; or how sanctions would be doled out if a member failed to report or under-reported the subsidy. Thee report argues that these errors have continued to pave the way for carbon emissions, wasteful spending and climate change that the countries banded together to avoid. 

"If their aim is to avoid dangerous climate change, governments are shooting themselves in both feet," Whitley said. "They are subsiding the very activities that are pushing the world towards dangerous climate change." 

The report illustrated the variety of the subsidies in 2011:

  • Germany provided the equivalent of more than $2.5 billion to the hard coal sector in 2011.

  • The U.S. gave $1 billion fuel tax exemption for farmers, $1 billion for the strategic petroleum reserve and $500 million for fossil energy research and development in 2011.

  • United Kingdom made oil and gas production tax concessions equal to more than $450 million in U.S. dollars in 2011.

The report calls on the G20 to make a strong commitment to phase out fossil fuel subsidies by 2020 with early action by rich-country members on subsidies to coal and oil and gas exploration within two years. Whitley suggests the talks begin this month at the Conference of Parties in Warsaw, Poland.

"Global action to cut fossil fuel subsidies is long overdue," Whitley said. "Collectively, the G20 accounted for 78 percent of global carbon emissions from fuel combustion in 2010.

"Now is the time to translate principle into practice by setting clear and ambitious goals and timelines for action."

Visit EcoWatch’s RENEWABLES page for more related news on this topic.

EcoWatch Daily Newsletter

Micromobility is the future of transportation in cities, but cities and investors need to plan ahead to avoid challenges. Jonny Kennaugh / Unsplash

By Carlo Ratti, Ida Auken

On the window of a bike shop in Copenhagen, a sign reads: Your next car is a bike.

Read More Show Less
An American flag waves in the wind at the Phillip Burton Federal Building in San Francisco, California on May 17 where a trial against Monsanto took place. Alva and Alberta Pilliod, were awarded more than $2 billion in damages in their lawsuit against Monsanto, though the judge in the case lowered the damage award to $87 million. JOSH EDELSON / AFP / Getty Images

By Carey Gillam

For the last five years, Chris Stevick has helped his wife Elaine in her battle against a vicious type of cancer that the couple believes was caused by Elaine's repeated use of Monsanto's Roundup herbicide around a California property the couple owned. Now the roles are reversed as Elaine must help Chris face his own cancer.

Read More Show Less
Sponsored
Butterfly habitats have fallen 77 percent in the last 50 years. Pixabay / Pexels

The last 50 years have been brutal for wildlife. Animals have lost their habitats and seen their numbers plummet. Now a new report from a British conservation group warns that habitat destruction and increased pesticide use has on a trajectory for an "insect apocalypse," which will have dire consequences for humans and all life on Earth, as The Guardian reported.

Read More Show Less
Six of the nineteen wind turbines which were installed on Frodsham Marsh, near the coal-powered Fiddler's Ferry power station, in Helsby, England on Feb. 7, 2017.

Sales of electric cars are surging and the world is generating more and more power from renewable sources, but it is not enough to cut greenhouse gas emissions and to stop the global climate crisis, according to a new report from the International Energy Agency (IEA).

Read More Show Less
"Globally, we're starting to see examples of retailers moving away from plastics and throwaway packaging, but not at the urgency and scale needed to address this crisis." Greenpeace

By Jake Johnson

A Greenpeace report released Tuesday uses a hypothetical "Smart Supermarket" that has done away with environmentally damaging single-use plastics to outline a possible future in which the world's oceans and communities are free of bags, bottles, packaging and other harmful plastic pollutants.

Read More Show Less
Sponsored
Children are forced to wear masks due to the toxic smoke from peat land fires in Indonesia. Aulia Erlangga / CIFOR

By Irene Banos Ruiz

Pediatricians in New Delhi, India, say children's lungs are no longer pink, but black.

Our warming planet is already impacting the health of the world's children and will shape the future of an entire generation if we fail to limit global warming to well below 2 degrees Celsius (35.6°F), the 2019 Lancet Countdown Report on health and climate change shows.

Read More Show Less
Private homes surround a 20 inch gas liquids pipeline which is part of the Mariner East II project on Oct. 5, 2017 in Marchwood, Penn. Robert Nickelsberg / Getty Images

The FBI is looking into how the state of Pennsylvania granted permits for a controversial natural gas pipeline as part of a corruption investigation, the AP reports.

Read More Show Less
Three cows who were washed off their North Carolina island by Hurricane Dorian have been found alive after swimming at least two miles. Carolina Wild Ones / Facebook

Three cows who were washed off their North Carolina island by Hurricane Dorian have been found alive after swimming at least two miles, The New York Times reported Wednesday.

Read More Show Less