G7 to phase out fossil fuels subsidies by 2025
This could be another turnaround for the fight against climate change as the G7 is willing to eliminate subsidies for oil, coal and natural gas within the decade.
In a previous article I was noting that doing so would cut emissions by 6 percent per year according to a United Nations study. This is a lot. Even more if you remember that according to the IMF, these direct and indirect subsidies weight 5.3 trillion US Dollars globally.
The G7 nations have for the first time set a deadline for the ending most fossil fuel subsidies, saying government support for coal, oil and gas should end by 2025.
The leaders of the UK, US, Canada, France, Germany, Italy, Japan and the European Union encouraged all countries to join them in eliminating “inefficient fossil fuel subsidies” within a decade.
“Given the fact that energy production and use account for around two-thirds of global greenhouse gas emissions, we recognise the crucial role that the energy sector has to play in combatting climate change,” said the leaders’ declaration,issued at the end their summit in Japan. The pledge first entered into G7 (then known as G8) declarations in 2009 but has until now lacked a firm timeline.
Shelagh Whitley, a research fellow at the Overseas Development Institute, called it an “historic day” but said 2020 was a more appropriate date if governments were serious about their commitments to the global climate deal agreed in Paris in December.
Across the G7, subsidies are already falling, assisted by falling commodity prices.
As a sidenote it is also worth noting that the G20 – which includes China, India, Brazil and many other fast developping nations – should also eliminate fossil fuels subsidies. Equally important move, implemeting a global carbon tax has to be done as quickly as possible. But this is another story we shall get back to in time, so stay tuned !
Sidenote: here is an interesting read on these subsidies.