UNFCCC Cop: Parties mull fossil fuel subsidy cuts

Spanish Market: Crude oil, Emissions, Natural gas, Oil products
04/12/14

More than 190 countries meeting at the 20th Conference of the Parties (Cop 20) in Lima, Peru, are contemplating a firm decision to scale down fossil fuel subsidies and high-carbon investments.

The option appears in the finance section of an informal text compiled by the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) co-chairs, outlining various party views on elements of a new global climate deal to be adopted next year in Paris.

"So it's in there, but it's [only] an option — we need to make it a decision. Unless we defend it very strongly, there's a high chance that it may be left out," said Climate Action International policy officer Alix Mazounie.

A provision to phase out fossil fuel subsidies and investments should form a key part of the Paris agreement, Mazounie said, given that fossil fuel subsidies completely undermine climate action and contradict the UN Framework Convention on Climate Change (UNFCCC)'s aims.

"It has been the elephant in the room for 20 years. The worst part is it's money that we could be spending on renewables and energy efficiency," Mazounie said.

Every year the fossil fuel industry receives massive public funding, often in the form of tax breaks, to keep exploring for and producing fossil fuels, Mazounie said. So while the US pledge of $3bn to the Green Climate Fund (GCF) over the next couple of years is "pretty big", she said, "it is only one fifth of what the US spends today on fossil fuel exploration."

Governments know very well they're investing in the wrong area, according to Mazounie. In 2009, the G20 group of countries agreed to phase out inefficient fossil fuel subsidies. But last year, annual G20 fossil fuel subsidies more than doubled to $88bn, from $37bn in 2012, she said, citing figures from a report, The Fossil Fuel Bailout, released by the Overseas Development Institute (ODI) in November.

There are positive developments too, such as the World Council of Churches' decision to divest from fossil fuels as a number of other institutions have also done, France's announcement last week that it will join other countries who have decided to stop funding coal-fired plants abroad, and India's doubling of its tax on coal production, Mazounie said.

But these are still just "sprinkles of good news" - it's still not "shifting the billions that we need to shift" into a low-carbon economy, she said.

"We want to ensure next year's deal establishes a long-term vision to phase out fossil fuels, which is a key recommendation of the Intergovernmental Panel on Climate Change (IPCC)," Mazounie.

To further this aim, organisations campaigning against fossil fuel usage will hold a global disinvestment day on 13 February next year, she said.

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Mexico central bank cuts target rate to 7pc

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19/12/25

Australia needs electricity carbon policy: Commission

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19/12/25

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