New Delhi: A new report on Thursday showed that even before the energy crisis brought about by Russia’s invasion of Ukraine, G20 government support to produce fossil fuels reached new heights at $64 bn in 2021, despite worsening impacts of the climate crisis.
The findings are detailed in the eighth annual Climate Transparency report, produced by an international partnership of organisations, to take stock of G20 climate action.
Wider G20 government fossil fuel subsidies had fallen to $147 billion in 2020, they rose again by 29 per cent to $190 billion in 2021, according to data from the Organisation of Economic Co-operation and Development (OECD).
Subsidies have continued to rise into 2022, partly because of the Russian invasion of Ukraine triggering skyrocketing energy prices, which have also supercharged profits for energy companies.
The countries with the highest total subsidies for fossil fuels were China, Indonesia and the UK backing production and consumption that will contribute to driving global temperatures well above the 1.5 degrees Celsius warming limit agreed globally in the Paris Agreement and reaffirmed last year at COP26 in Glasgow.
“Too much public finance for energy in the G20 is still skewed towards the fossil fuel industry. 63 per cent of G20’s public finance for energy went to fossil fuels in 2019-2020,” said Ipek Gencsu, Senior Research Fellow at ODI and finance lead of the report.
“Last year, the G20 reaffirmed its 2009 commitment to aphase out and rationalise, over the medium term, inefficient fossil fuel subsidies’, but I think we can safely say we are now in that amedium term’ and it’s clear the G20 has failed to deliver, instead continuing to use public funds to distort the market in favour of fossil fuels,” he added.
The Climate Transparency report shows that energy emissions likewise rebounded across G20 countries by 5.9 per cent in 2021, climbing back above pre-pandemic levels, despite warnings from the Intergovernmental Panel on Climate Change that must halve emissions by 2030 to keep the 1.5 degrees warming limit enshrined in the Paris Agreement alive.
Emissions in the power and buildings sector rose in 2021 to higher than pre-pandemic levels, and per capita emissions in China and Turkey are now higher than in 2019.
“The G20 is responsible for three-quarters of the world’s emissions. These are the world’s biggest economies, many of them home to the finance and technologies needed to tackle the climate crisis. We are now in a moment where geopolitics and energy security issues are combining to really hammer home the benefits of cheap renewables, yet we are still seeing many of these governments turning to fossil fuels as the solution,” commented Bill Hare, CEO of Climate Analytics, one of the organisations leading the analysis in the report.
“Gas and coal can be the most expensive, highest emitting, and least secure options for energy, but they still will receive the highest levels of government support,” he added.
The good news is that the share of renewables in the power generation mix increased in all G20 countries between 2016 and 2021 with the strongest increase in the UK (plus 67 per cent), Japan (plus 48 per cent) and Mexico (plus 40 per cent).
The lowest increases, all well below the five-year G20 average of 22.5 per cent, were observed in Russia (plus 16 per cent) and Italy (14 per cent).
Despite the longer-term growth, the share of renewables did not increase between 2020 and 2021.
The Climate Transparency report also contains information on how climate change is already impacting some G20 economies.
Rising emissions have led to record-breaking flooding, fires, droughts, and storms, causing damages of billions.
“Rising temperatures have brought income losses in services, manufacturing, agriculture, and construction sectors, with India, Indonesia and Saudi Arabia being the most affected countries. The respective income losses are estimated at 5.4, 1.6 and one per cent of GDP,” said Sebastian Wegner from the Berlin Governance Platform, one of the report’s main authors.
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