Two for the Price of None

Over the past week, we’ve heard discussions in a variety of forums here in Bonn on how to address the urgency of climate change by increasing emissions reductions and mo-bilizing enough climate finance to help fund the transition to a climate resilient future for all. Well, ECO has found just the source to help both of these efforts – end fossil fuel subsidies by 2015!

Let’s start by raising mitigation ambition. The UNFCCC re-ceived many submissions on raising ambition. 111 countries were represented in the sub-missions citing phasing out fossil fuel subsidies as a po-tential source of additional emission reductions repre-sent. And how often does that happen?

Perhaps all 111 countries saw the recent statements by the Chief Economist of the International Energy Agency, who said that phasing out fossil fuel subsidies could provide half of the emission reductions needed to stave off dangerous climate change between now and 2020. Now, because the devil is often in the details, phasing out these  government handouts could go a substantial way in helping close the gigatonne gap. The ambition work programme under the ADP would be well-served to include this in its deliberations.

Now, on to finance. Recent estimates show that fossil fuel subsidies in rich countries could be in the tens of billions of US dollars, to perhaps as much as $100 billion. How about, instead, governments spend that money to support climate change fighting efforts? ECO encourages delegates to include this in discussions of both short-term and long-term finance.

While we’re at it, let’s all make sure we’re talking about the same stuff.  The numbers quoted above are estimates, mainly because the data out there isn’t transparent enough to allow for more precise figures. But, wouldn't you know, the UNFCCC could provide just the tools to increase transparency in this area through its national communications and biennial reports.  And since so many UNFCCC parties want to remove these subsidies, why not report on their existence and efforts to remove them? Who doesn’t like taking credit for doing good things, after all?

ECO hopes parties here at the UNFCCC will take note of the multiple benefits of removing fossil fuel subsidies. ECO encourages delegates to speak to their colleagues in the G20 and Rio+20 negotiations as well, so that progress can be made wherever possible, in order to end fossil fuel subsidies by 2015.

Related Newsletter : 

Fossil Subsidies: Hiding in Plain View

Looking to fill gaps?  Eliminate fossil-fuel subsidies!

On the way to Durban, ECO was rereading some of the past articles that have graced its pages. One that is particularly striking and poignant is from Bonn in June 2011. Title: “Developed country UNFCCC climate finance commitments in 2013”.  Article text: “0”. 

It is also striking just how many articles there have been on the need to close the gigatonne gap and stay as far below 2° C as possible.  If only there was a way to kill two birds (figuratively, of course, as we would not want to upset the CBD) with one stone – oh wait,there it is – eliminate fossil-fuel subsidies!

The OECD recently estimated that USD $45 to $75 billion a year has been spent on fossil fuel subsidies in its member countries in recent years.  And the IEA in its 2011 World Energy Outlook finds another USD $400 billion globally in consumption subsidies. 

Imagine if much of that money was used to support renewable energy, energy efficiency, adaptation and other climate-related measures so sorely needed?  Capitalization of the Green Fund would be a cinch! 

As for the gigatonne gap, a joint report by IEA, OECD, the World Bank and OPEC (yes you read that right) showed that phasing out subsidies to fossil-fuel consumption alone could reduce greenhouse gas emissions by 6.9% in 2020. That’s “more than Kyoto” right there and is only a portion of the subsidies that need to go.  (Of course, to assuage concerns over energy access, any phasing out of consumption subsidies in developing countries needs to be supported by climate finance to support safe renewable forms of energy – though we also know that consumption subsidies are socially regressive with only 8% of that $400 billion reaching the poorest 20%, according to the IEA).

So it is thrilling to see that “Removing fossil fuel subsidies and/or reporting thereof” is listed as a means to increase the level of ambition of Parties in the “matters relating to paras. 36-38” text.  As ECO has stressed many times before, the current targets and actions pledged by Parties are insufficient to keep warming below 2° C, let alone 1.5° C. 

Unfortunately, it doesn’t seem likely the gap will be completely closed in Durban.  So it is essential that the process next year further clarifying targets and actions and closing that gap include the consideration of phasing out fossil fuel subsidies. 

Phasing out fossil fuel subsidies can also contribute to efforts by developing countries to achieve a significant deviation from business as usual emissions by 2020, again with the proviso of climate finance to ensure energy access for all.  ECO expects to see this linkage made explicit in COP decision text adopted at here in Durban. MRV negotiators (hint, hint!) may also wish to draw inspiration from the OECD’s inventory on fossil fuel subsidies and how this could be incorporated and improved upon by reporting under the UNFCCC.

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