Eliminating Subsidies to Fossil Fuel Production

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Eliminating Subsidies to Fossil Fuel Production

Overseas Development Institute (ODI)

 

For decades, government subsidies to fossil fuel production have encouraged wasteful spending and harmful greenhouse gas emissions. It is broadly agreed that phasing out subsidies for fossil fuels could make a significant contribution to keeping global warming below the 1.5 – 2°C goal of the Paris Agreement.  However, even though the need to phase out fossil fuel subsidies has become an agreed political priority for climate action and fiscal reform in many countries, progress has been insignificant so far. This project aims to address this challenge by implementing a strong international campaign advancing the end of government support for fossil fuel production.

Governments around the world continue to subsidise and finance efforts to find and produce more fossil fuels, thereby exacerbating dangerous climate change with government resources that could be spent on public goods such as health, education and low-carbon energy. Rather than putting a high price on carbon, fossil fuel subsidies discount carbon and incentivise greenhouse gas emissions.

Recent research by ODI (The Overseas Development Institute), OCI (Oil Change International), and GSI (Global Subsidies Initiative) on G20 government support for fossil fuel production shows that, today, only limited guidance for fossil fuel subsidy reform exists. Moreover, there is little understanding of the links between subsidies for consumption and subsidies for production and of the links between subsidies and new fossil fuel exploration.

This project will launch a strong international campaign on subsidies and public finance. The campaign will strengthen coordination, apply pressure on global institutions and processes, and share lessons learned, analysis and tools with national and regional groups working on subsidy reform.

Photo: Consumers Energy

Grantee:
Overseas Development Institute (ODI)

Project:
International Campaign – Eliminating Subsidies to Fossil Fuel Production: Analysis, Advocacy and Outreach

Program Area:
Sustainable Finance

Grant:
DKK 4,876,725

Year:
2016-2018

The campaign will be implemented jointly by ODI, OCI, GSI, and Natural Resource Defense Council. Its objectives are:

  • An internationally agreed schedule and criteria for phasing out fossil fuel subsidies (led by the G20 with a phase out by 2020)
  • An agreement for a full ban on G20 public finance for fossil fuels by 2020 (ideally expanded to cover all countries by 2025)
  • Transparent and publicly available annual reporting of subsidies and public finance for fossil fuels
Odi map

Location of the project’s activities