The G20 has committed to phasing out inefficient fossil fuel subsidies. Such measures, intended to favour energy security or protect the poor from high fuel costs, encourage the extraction and wasteful consumption of fuels, undermine the competitiveness of renewable energy, and further aggravate climate change. Yet despite the G20 pledge and mandates under the 2030 Agenda and the Paris Agreement, reform has been slow.
The paper Phasing Out Fossil Fuel Subsidies in the G20: Progress, Challenges, and Ways Forward analyses progress and challenges to implementing the G20’s commitment and outlines policy options for G20 policymakers, drawing upon the international trade framework as a means to overcome current implementation deadlocks. The objective in this paper is to examine the nature and scope of the G20 commitment, reflect on the implementation measures taken so far, and suggest some ways forward.
Every year governments spend $543 billion subsidising fossil-fuels to consumers.
This report presents a model that analyses fossil fuel subsidy reform across 20 countries showing an average reduction in national GHG emissions of 11% by 2020, and average annual government savings of USD 93 per tonne of CO2 abated.