Start funding climate action and stop funding climate chaos!
While working hard on Paris agreement, there are massive struggles on resolving Fossil Fuel Subsidies. According to Shelagh Whitley, a research fellow of Overseas Development Institute (ODI) who works on private climate finance state that G20 countries current fossil fuel subsidies (USD 452 billion) are 4 times more than global subsidies for renewable energy (USD 121 billion).
Based on the recent report “Empty Promises – G20 Subsidies to Oil, Gas and Coal Production”, Russia, US and UK have contributed high national fossil fuel subsidies. While Japan, China and Korea have large contribution in Public Finance. Saudi, Russia and Brazil’s contribution via State-Owned Enterprise sum up to USD 135.9 million per year. In general, state-owned Fossil Fuels (FF) subsidy is the highest, USD 286 billion, where 70% of FF subsidies are government owned which may, or may not be listed on the stock exchange.
As quoted by Christiana Figueres ”Fossil Fuel subsidies is negative support of climate finance” Despite the pledges made by developed countries to scale up new and additional climate finance, many countries are failing to meet their commitment. As based on the OCI report, over USD 78 billion was spent by developed countries to support fossil fuel production in 2013 and 2014.
On the other hand, each year, G20 countries contributed FF subsidizes of USD 77 billion. Notably, these figures triumphs the current Green Climate Fund accumulation of USD 10.2 billion and developing countries receive just USD 4 billion to USD 5 billion to adapt to impacts of climate change. Many developed countries are failing to meet their commitment and much of the climate finance is not new and sadly, there is little clarity of how these money are mobilized for mitigation and adaptation.
But, this can change. There are some key recommendations for financing future climate action. For instance, more actions should be done at the national level. Government need to honour their pledges to phase out FF subsidies especially via public finance institutions. This includes the provision of grants, equity, loans, guarantees and insurance by majority government owned financial institutions for domestic and international fossil fuel production.Hence, there is the importance of finalizing the Paris agreement as well in achieving low emission and climate-resilient societies and economies development. In the latest Draft Agreement, Article 6, Paragraph 1 & 10 show clear language on reducing financial support for high emission investments.
In conclusion, “we need to ensure this commitment stays building on and strengthening previous commitments made through sustainable development goals (SDGs) and G20s commitments.” – Maeve McLynn, Climate and Development Policy Coordinator, CAN Europe
Written by: Jolene Journe T.
Edited by: Merryn