At the G20 leaders’ late September meeting in Pittsburgh, the assembled decried the subsidization of the fossil fuel industry, calling the subsidies “inefficient” and representative of an “era of irresponsibility.” The leaders committed to “phasing out and rationalizing” the subsidies, worth over $300-billion annually, in an effort to curb climate change, and left it up to the world’s most powerful finance ministers to figure out a way to do so at their November meeting in Scotland. 

The November meeting has come and gone, and the finance ministers have decided that the issue needs more study. They called on the IEA, OPEC, OECD and World Bank to produce a joint report on phasing out the subsidies for their next meeting. At that time, the ministers believe they can come up with “implementation strategies and timeframes” for “rationalizing and phasing out inefficient fossil fuel subsidies,” and for providing targeted assistance programs for those suffering from energy poverty.

The IEA and OECD were responsible for the original report that brought the relationship between subsidies and GHG emissions to the attention of the G20 in the first place. Their first report said that eliminating these subsidies would result in global emission reductions of 10% by 2050, would reduce market distortions and wasteful consumption, and would encourage investments in renewable energy. The requested joint report could have significant impacts on fossil fuel providers as well as those involved in the renewable energy market should the G20 act on their advice.

By Jeff Beyer .(JavaScript must be enabled to view this email address)