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G20 fossil fuel subsidies may top $450bn/yr

12 Nov 2015 22:05 GMT
G20 fossil fuel subsidies may top $450bn/yr

Washington, 12 November (Argus) — G20 countries could be spending more than $450bn/yr to subsidize fossil fuel production in the form of tax breaks, investments and public financing, according to a group that wants to phase them out.

Tax incentives and direct government spending represents $78bn/yr of that estimate, advocacy group Oil Change International said in a report. Grants and loans from government-owned banks provide $88bn/yr, while $286bn/yr comes from investments in fossil fuel production from state-owned companies.

Those spending levels run counter to commitments the EU and the 19 other countries that make up the G20 provided during a 2009 summit, the group said. The G20 countries then pledged to phase out "inefficient fossil fuel subsidies" over the medium term because they encouraged "wasteful consumption" and made it harder to deal with climate change.

The IMF in a report in June estimated the cost of all energy subsidies across the world, including the costs of climate change and health effects from air pollution, would be $5.3 trillion this year. Direct energy subsidies only represented $541mn of that, while climate change and air pollution represented the majority of subsidized costs.

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