Time to stop subsidising fossil fuels

30th September 2015

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  • Adaptation ,
  • Generation ,
  • Fossil fuels


Andrew Hayward-Browne

Continuing financial support by governments around the world for the production and consumption of fossil fuels is hampering global efforts to curb emissions and combat climate change, claims the OECD.

In a report, the Paris-based organisation outlines nearly 800 spending programmes and tax breaks used by governments in the 34 OECD countries and six emerging economies - Brazil, China, India, Indonesia, Russia and South Africa - to encourage the consumption or production of fossil fuels. It said the measures, which amounted to between $160 and £200 billion a year, reduced prices for consumers and lowered exploration and exploitation costs for oil and gas companies.

OECD secretary-general Ángel Gurría said it was time to reform support for fossil fuels. "The time is ripe for countries to demonstrate they are serious about combating climate change, and reforming harmful fossil fuel support is a good place to start," he said. Gurría added that governments were spending almost twice as much money supporting fossil fuels as was needed to meet the climate-finance objectives, which call for $100 billion a year by 2020.

"We must change the course. This new OECD [report] offers a roadmap to turn around harmful policies that are a relic of the past, when pollution was still seen as a tolerable side-effect of economic growth."

The OECD analysis revealed that most of the support mechanisms were put in place before 2000, but argued that policy priorities have changed and governments ought to rethink the relevance and effectiveness of policies that use taxpayers' money to sustain a reliance on fossil fuels. It said the relatively low oil price presented a unique opportunity for governments to phase out support for the consumption and production of fossil fuels.

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