G-20 countries allocate US$1.4 trillion (about Rs 116 lakh crore) of public funds to support fossil fuels in 2022 with an aim to counter rising fuel prices due to the Ukraine war and strengthen energy reserves. This information has been given in a new study. The study by the independent think tank International Institute for Sustainable Development (IISD) and partners comes as G20 leaders prepare for their September 9-10 summit in New Delhi.
India proposes massive cut in fossil fuel subsidies
The study states that India, currently the G-20 Chair, has made good progress. India's chairmanship of the G-20 calls for a 76 percent cut in fossil fuel subsidies from 2014 to 2022, boosting support for clean energy. The study said that this shows India in a strong position to lead on this issue.
According to the study, the bulk of the US$1.4 trillion includes fossil fuel subsidies (US$1 trillion), state-owned enterprise investment (US$322 billion) and money lent by public financial institutions (US$50 billion). Are. It added that this number is more than double what was seen in 2019 before the Covid-19 pandemic and energy crisis.
These figures are a stark reminder that G-20 governments continue to spend massive amounts of public money on fossil fuels, despite the increasingly devastating effects of climate change, said Tara Laan, senior associate at IISD and lead author of the study. Are. He emphasized that it is important for the G-20 to address the issue of fossil fuel subsidies at the summit, especially as the effects of climate change worsen.
Tara said the G-20 has the power and responsibility to transform our fossil-based energy systems. Putting fossil fuel subsidies on the agenda for the G-20 summit in Delhi and taking meaningful action to eliminate all public financial flows to coal, oil and gas is important. The report highlights that subsidizing fossil fuel prices is a problem because it encourages overuse of these harmful energy sources.
Researchers have proposed a solution regarding this. According to the proposal, G-20 countries could receive an additional US$1 trillion every year by setting a minimum carbon tax ranging from US$25 to US$75 per metric ton CO2 equivalent, depending on their income.
Current taxes on fossil fuels are very low in the G-20, averaging just US$3.2 per metric ton of CO2 equivalent. According to the report, this is worrying because fossil fuel companies made huge profits during the energy crisis last year. The report also suggests a clear plan to get rid of fossil fuel subsidies. In which it has been said that developed countries should stop it by 2025 and emerging economies should end it by 2030.
The report suggests that if the G-20 group makes a small difference to the trillions of dollars spent on fossil fuel subsidies, it could make a big difference. This will help bridge the gap between wind and solar energy (US$450 billion per year), combat world hunger (US$33 billion per year), provide electricity and cooking for all (US$36 billion per year), and Developing countries can get help with climate funds (US$17 billion per year).