G20 Governments Give Oil Companies $100 Billion a Year in Subsidies
On Sunday, the final day of the G20 Summit, the world's leaders could either have followed through on the commitments made at the Pittsburgh summit and phase out fossil fuel subsidies or, as leaked reports suggested, take a step back and water down the plan by bringing voluntary and home-grown options to the table.
Although language such as “voluntary” and ”member-specific approaches” was removed from the day’s proceedings, and a new milestone—review of implementation plans at the next G20 Summit, in Seoul, Korea—was added to the group’s commitments, activists still feel the original commitments have been watered down.
The document was strengthened thanks to pressure from US President Barrack Obama, according to a Reuter’s report, but Steve Kretzmann of Oil Change International said that despite some positive steps, the original commitments have nonetheless been weakened.
“The words voluntary are gone now, but they have achieved the same result by allowing each country to phase out whatever they feel like phasing out,” he said.
Kretzmann also said the new plan calls for the phasing out of "inefficient" fossil fuel subsidies. Here’s the catch: Each country will be able to define “inefficient” as they see fit.
“There are six countries in the G20 that are going to claim they have no inefficient fossil fuel subsidies at all,” Kretzmann said. “It is quite laughable.”
According to Kretzmann, the United States will commit to eliminating $3.6 billion in subsidies (already in the current budget), while Japan and Australia apparently have absolutely no inefficient fossil fuel subsidies at all.
"The terrible impacts of the Gulf oil disaster highlight the insanity of giving billions of taxpayers' dollars to subsidize dirty oil and coal,” said Mark Fried of Oxfam Canada. “Sadly, what is obvious to everyone else does not seem obvious to world leaders."
According to an Organization for Economic Co-operation and Development (OECD) report, phasing out fossil fuel subsidies by 2020 would result in a dramatic 10 per cent drop in greenhouse gas emissions by 2050. The OECD estimated recently that subsidies to the companies producing oil, gas, and coal are worth approximately US$100 billion a year.