x Abu Dhabi, UAEWednesday 17 January 2018

G20 to end fossil fuel subsidies

The Group of 20 industrialised and emerging market countries agree the move, in principle, to reduce carbon emissions.

The Group of 20 (G20) industrialised and emerging market countries have agreed in principle to phase out subsidies on fossil fuels in a move aimed at curbing demand for oil, coal and gas in order to reduce carbon emissions. "Inefficient fossil fuel subsidies encourage wasteful consumption, distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change," the G20 said today in a statement following its two-day summit in Pittsburgh. "We underscore anew our resolve to take strong action to address the threat of dangerous climate change," it added. The governments of several G20 countries, including China, Russia, India and Saudi Arabia, subsidise fuel prices to reduce the burden on consumers and foster popular support. Others, including the US government, have used tax breaks, cheap loans and other measures to subsidise the production of oil, gas, coal and electricity, often as a measure to prop up employment. But it was the US president, Barack Obama, who pushed at the summit to have all such subsidies gradually eliminated. Reaching an agreement on the proposal was by no means a foregone conclusion, and is being viewed as a victory for the president, whose ability to produce results on climate change had been questioned. The energy and finance ministers of the G20 nations will now be instructed to develop time frames and strategies for implementing the phase-out, allowing the leaders to report back at the group's next summit. The G20 also called on international energy organisations including Opec and the International Energy Agency (IEA) to analyse the scope of energy subsidies and make suggestions for their elimination. tcarlisle@thenational.ae