G20 urged to dump $100 billion in fossil fuel exploration subsidies

Intro

While the Intergovernmental Panel on Climate Change has warned that the world must phase out up to 70 per cent of fossil fuels by 2050, Australia and other G20 nations continue to pay lip service to a clean energy transition by spending billions subsidising new fossil fuel exploration activities. A new report from Oil Change International (US) and the Overseas Development Institute (UK) has highlighted the perverse incentives governments are giving to fossil fuel companies, with G20 governments spending $100 billion (USD$88 billion) a year searching for new oil, gas, and coal reserves. The US leads the way with $5.9 billion (USD$5.1bn), but Australia’s $4 billion (USD $3.5bn) puts it a close second, and ahead of the $2.7 billion (USD $2.4bn) Russia spends. Globally, governments subsidise fossil fuels to the tune of AUD$887 billion a year, while spending, by comparison, a tiny AUD$117bn (USD$101 bn) on renewable energy. Such skewed support for fossil fuels is a direct threat to the global carbon budget, which states that two thirds of known fossil fuel reserves have to stay in the ground if the world is to keep average warming to 2DegC. The report urges G20 leaders to phase out these dirty, inefficient exploration subsidies as a first step to meeting existing commitments to avoid harmful climate change.

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  • MT @gmcnevin: Oz spends $4Bn on fossil fuel exploration, when 2/3 of known reserves unburnable http://t.co/2x8S47JTol http://t.co/vZIROdujif

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Key Points

  • The science is unequivocal. Fossil fuel use is driving climate change and must be 70 per cent phased out by 2050, and totally by 2100. The global carbon budget means two thirds of known fossil fuel reserves must stay in the ground if the world is to stay below 2DegC of average warming, yet Governments continue to waste billions subsidising companies searching for new dirty energy sources we cannot burn when they should be supporting a renewable transition.
  • Governments give as much money to companies searching for new fossil fuel sources as they do supporting renewable energy, perversely skewing the playing field in favour of dirty energy sources. Renewable subsidies made up AUD$117 billion in 2013, this is roughly equal to the AUD$100 billion spent by the G20 on fossil fuel exploration subsidies, and a fraction of the almost $1 trillion that goes into fossil fuel subsidies in total globally.
  • The perverse incentives handed to fossil fuel companies are not only incompatible with a safe climate, but they are also increasingly economically foolhardy. Governments are putting in more than double the $42 billion the top 20 oil and gas companies invest in exploration, demonstrating how dependent the fossil fuel industry has become on public money to find and exploit hard-to-reach reserves. With falling coal and oil prices, such generous public subsidies are essentially propping up fossil fuel that would otherwise be deemed uneconomic. Meanwhile the price of renewable energy continues to fall.
  • Fossil fuel companies like Peabody Energy are quick to use poor people as a reason to burn more dirty fuel like coal, but governments give dirty energy companies vastly more money than it would take to provide power to every person on earth. The AUD$100 billion spent on fossil fuel exploration is almost double what the International Energy Agency estimates is needed annually to provide electricity and heat for all by 2030, which makes the Australian government’s “coal is good for humanity” argument seem all the more self serving.

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Key quotes

  • “Despite the widespread perception that renewables are costly, our research reveals that finding new fossil fuel reserves at home and abroad is costing Australian taxpayers $4 billion a year. Scrapping these fossil fuel exploration subsidies would begin to create a level playing field between renewables and fossil fuel energy.” The Overseas Development Institute’s Shelagh Whitley.
  • “Five years ago, Australia and other G20 governments pledged to both phase out fossil fuel subsidies and take action to limit climate change. Immediately ending exploration subsidies is the clearest next step on both fronts.” Oil Change International Director Stephen Kretzmann.
  • “I hope [German chancellor] Angela Merkel shirt-fronts Tony Abbott and asks him, ‘If Germany can go solar then why on earth can’t Australia?’. Last year was our hottest on record, this one’s shaping up to be even worse, and we’ve got a raging drought over a vast area. In spite of the overwhelming scientific evidence, our idiotic politicians are hooked on coal and gas, which is the cause of the problem. We have huge reserves of sunshine, so making use of it is simply a matter of common sense. Our Government’s reluctance to do so is an international embarrassment. Unlike coal, solar power really is good for humanity because it can provide the clean energy needed to lift people out of poverty across the world, without stuffing up the climate even more.” Farmer Rob McCreath.
  • “While the Abbott Government is confecting a budget crisis, it’s giving away billions of dollars of taxpayer money to the big mining companies to destroy our land, water, Great Barrier Reef and climate. This is despite Australia and other G20 countries agreeing five years ago to phase out fossil fuel subsidies. Since making that commitment, Australia has played a spoiler role by arguing its subsidies are ‘efficient’. It’s not efficient for billions of Australians’ taxpayer money to go into propping up the dying fossil fuel industry, stifling the transition we need to renewable energy.” Australian Greens mining spokesperson, Senator Larissa Waters.

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Suggested tweets

  • Paid to pollute, perverse incentives @ODI_development @PriceofOil #G20 #climate #fossil #fools #coalhardfacts #auspol
  • Ever wondered why we pay so much for #fossil #fuel companies to boil the place? Me Too. #G20 #onmyagenda @ODI_development@PriceofOil
  • New report shines light on our #fossil addicted economies @ODI_development @PriceofOil #G20 #subsidies http://www.odi.org/g20-fossil-fuel-subsidies

More tweets

  • RT @BusinessGreen: G20 urged to ditch $88bn subsidies for fossil fuel exploration http://t.co/MDFKrIe2ES
  • MT @renew_economy: #Fossil fuel follies: Massive subsidies underpin oil, coal exploration $4bn/yr in Aust, $100bn G20 http://t.co/eYzaKmkbXP
  • MT @renew_economy: So much for battling energy poverty. Just 1% of #fossil fuel subsidies  to regions w no grid http://t.co/3lI3cReqqO
  • RT @CyberNewsUK: http://t.co/0fOLCdzBc7 AFP: G20 states spend $88bn in fossil fuel exploration subsidies http://t.co/tlR9JcnJJg
  • RT @Jackthelad1947 Aus still giving AUD$4bn/yr to fossil fuel exploration #ffsG20 http://t.co/uwen06ns7c http://t.co/ctHdhfcMFS