LONDON: Leading world economies are spending $88bn a year in fossil fuel exploration subsidies, sapping investment from low-carbon alternatives and increasing the risk of “dangerous climate change”, a report said yesterday.
The report by Britain’s Overseas Development Institute think tank said that these subsidies “could drive the planet far beyond the internationally agreed target of limiting global temperature increases to no more than two degrees Celsius”.
The report was published in conjunction with Oil Change International, a US advocacy group, and comes ahead of a meeting of G20 leaders this weekend in Brisbane, Australia.
Britain, Russia, the United States and Australia had some of the highest national subsidies, said the report, which pointed in particular to Washington providing $5.1bn to fossil fuel industries last year — almost double the level in 2009. The report also pointed to investments made by state-owned companies as a form of subsidy particularly prevalent in Brazil, China, India, Mexico, Russia and Saudi Arabia. “Levels of support range from $2-5bn in Russia, Mexico and India, to $9bn in China, $11bn in Brazil and $17bn in Saudi Arabia,” it said.
It identified public finance as a third form of subsidy for supporting fossil fuel exploration, highlighting its use in Canada, China, Japan, Russia and South Korea.
The report said that the funds were “uneconomic investments” and “a publicly financed bailout for carbon-intensive companies” at the expense of wind, solar and hydro-power. “Without government support for exploration and wider fossil-fuel subsidies, large swathes of today’s fossil-fuel development would be unprofitable,” the report said. AFP
