G20 countries called out on fossil fuel subsidies

27 Jun 19

Governments of G20 countries gathering in Japan for a summit this week have more than doubled the subsidies they provide to coal power plants in just three years.

A report has found that the average annual amount they spent to help build and sustain coal-fired power plants increased from $17bn to $47bn between 2014 and 2017.  

The increase in financial support comes despite repeated pledges by developed economies to phase out subsidies to all fossil fuels to help prevent climate change.

“It has now been 10 years since the G20 committed to phasing out subsidies to fossil fuels, yet astonishingly some governments are actually increasing the amount they give to coal power plants,” said Ipek Gençsü, a research fellow at the Overseas Development Institute and lead author of the report.

“Momentum is growing around the world for governments to take urgent action to tackle the climate crisis. 

“Ending subsidies to coal would bring environmental, social and economic benefits to all and help set a level playing field for clean energy.”

The report, G20 coal subsidies: Tracking government support to a fading industry, found that despite a historic fall in total investment in coal, G20 governments provide $64bn each year to prop up its production and consumption.

Three quarters of this amount goes to coal-fired power production – which was the biggest single contributor to the rise in CO2 emissions in 2018.

An IMF report put global subsidies for fossil fuels at a staggering $5.2 trillion in 2017 despite growing pressure worldwide to reduce them.

The latest research was conducted by the ODI, Oil Change International, the International Institute for Sustainable Development and the Natural Resources Defence Council.

Their report is published ahead of this week’s G20 summit in Japan this weekend and for the first time tracks government subsidies to coal production and consumption

The summit’s host, Japan is one of the largest providers of support – spending at least $5bn per year on coal overseas – despite calls by prime minister Shinzo Abe for other governments to step up action on climate change.

Han Chen, manager of international energy policy at the NRDC, said: “Other G20 governments may struggle to take Japan’s rhetoric on climate change seriously, as this year’s G20 host government continues to pour billions of dollars into propping up coal in Japan and around the world. 

“If prime minister Abe is serious about dealing with climate change, he should lead by example and end Japan’s government-backed finance for coal.”

  • Gavin O'Toole, expert on Latin America
    Gavin O'Toole

    A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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