http://www.rtcc.org/2013/07/24/eu-chiefs-call-for-g20-decision-on-fossil-fuel-subsidies/

 

The European Union's top two officials say cutting fossil subsidies should be a priority for the forthcoming G20 summit, which takes place in St Petersburg in September.

 

In a joint letter to EU heads of state, European Commission President Juan Manuel Barroso and European Council chief Herman Van Rompuy also call for progress on climate finance commitments.

"On energy matters, it is important to make progress on phasing out fossil fuel subsidies, incorporating green growth policies in structural reform agendas, generating climate finance, improving the transparency of commodity markets, and promoting investment in energy infrastructure," they write.

Based on GDP, the EU is the G20's largest member. The UK, Germany and France also take part independently.

Barroso and Van Rompuy add: "We call on all G20 members to also step up their efforts and further deepen our cooperation in order to ensure strong, sustainable and balanced growth."

The IMF estimates global fossil fuel subsidies amount to US$1.9 trillion a year. These come in the form of tax breaks, reduced prices and state contributions to oil and gas firm investments.

Recent UN climate finance talks in Manila ended with proposals that US$600 billion could be raised by targeting monies paid to coal, oil and gas.

Signs of change

Last week the World Bank became the latest leading financial institution to announce it would no longer offer finance to coal power plants under normal circumstances, a policy that was mirrored today by the European Investment Bank.

Campaigners say that reducing subsidies would have a significant effect on global greenhouse gas emissions.

In May, EU Climate Commissioner Connie Hedegaard and Poland Environment Minister Marcin Korolec, who will also chair UN climate talks in November, said reducing energy subsidies and setting a target to cut oil imports should be a priority for European policymakers.

"Instead of offering unsustainable and environmentally damaging subsidies for fossil fuels, public finance should encourage the development of new industries and businesses that are emerging in the course of the low-carbon transition," Hedegaard said.

"The industries of the future, which will create jobs that last, are those that will use scarce resources efficiently, and that can pay the real environmental and health costs of the resources that they use."

Russia provides some of the largest subsidies for fossil fuels in the world.

In 2009 the International Energy Agency (IEA) estimated that Russian subsidies for the consumption of fossil fuels totalled almost US$34 billion.

The G20 agenda calls on parties to offer "recommendations on the voluntary peer review process for fossil-fuel subsidies".

Last month Russian Federation President Vladimir Putin was presented with proposals to encourage "Strong, Sustainable, Balanced and Inclusive Growth" by civil society, although it is unclear how these were received.