The most recent draft of the Sustainable Development Goals (SDGs), an outcome from Rio+20 and The Future We Want, now includes international cooperation and potentially financial support towards cleaner fossil-fuel technologies; however, the draft goals no longer recognise the need to phase-out inefficient fossil-fuel subsidies, which stood at $554 billion in 2012 (IEA, 2013). That is four times the level of aid from the OECD DAC in 2013 ($134 billion). This is a step backwards.

Just before the summer break, the Open Working Group (or OWG, a group of UN Member Statesformed to aid the development of goals) was working hard to develop an initial draft of the SDGs, which are set to replace the Millennium Development Goals after 2015. The IISD’s Global Subsidies Initiative, the Friends of Fossil-fuel Subsidy Reform and many civil society organisations worked for inclusion of the issue in 2012, within the outcome document from Rio+20: ‘The Future We Want.’  This resulted in numerous activities leading up to Rio+20, including an online vote for the ‘Future You Want’ in which 1.37 million votes were cast, and the number one recommendation under Sustainable Energy for All was "take concrete steps to eliminate fossil-fuel subsidies." NGOs were active in drawing on public opinion with 350.org, with Avaaz, Greenpeace and others launching further petitions and a ‘Twitterstorm’, averaging over 3 tweets per second calling for an end to fossil-fuel subsidies. The GSI, together with some 20 other organisations submitted a high level pledge to phase out fossil-fuel subsidies to Rio+20. Articles were written, side events were organised, bodies were mobilised (the full list of activities is here). Despite this surge of public interest, the agenda for fossil-fuel subsidy reform did not significantly advance. Rather, countries agreed, at least, on reaffirming existing commitments such as at the G-20 and APEC (2009), but this was not extended to include new countries or concrete actions to make reform happen. An opportunity had been missed to move forwards, but we had not moved backwards.

Since Rio+20 efforts to develop a new set of goals have been underway: the High Level Panel  (a group of eminent persons charged with providing recommendations for the goals to the UN Secretary General) published its findings in May 2013 and proposed “Phase out inefficient fossil fuel subsidies that encourage wasteful consumption” as part of a proposed Goal 7 on Secure Sustainable Energy. Initial ‘zero drafts’ from the OWG of the goals included similar wording that countries would “by 2030 phase out inefficient fossil fuel subsidies that encourage wasteful consumption, with solutions that aim to secure affordable energy for the poorest”, also under the proposed energy goal. However, the final outcome document from the Open Working Group, issued in July, does not include a goal around phasing out of fossil-fuel subsidies at all. Instead, the following wording is used, described as a Means of Implementation under the area of Sustainable Production and Consumption:

12.c rationalize inefficient fossil fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities

This is a step backwards: commitments to phase out fossil-fuel subsidy reform have been dropped, the wording is no longer a goal, no longer linked to energy, does not include an end date, and is no longer about a phase out (a departure from previous G20 and APEC commitments). Rather the current text reverts to the lowest common denominator from ‘The Future We Want’ starting with ‘rationalize’ but then proceeds with what must be a rather irrational (subsidies are a market distortion), ungainly and rambling  sentence. Does this describe the The Future We Want with regard to subsidization of fossil-fuels?

For more information to what happened behind the scenes, IISD’s Earth Negotiations Bulletin provides a detailed view and overall sense of the outcome. Along with four other ‘difficult’ issues, fossil-fuel subsidy reform was moved to an informal contact group for discussion. According to ENB, delegations “expressed divergent views on a target relating to fossil fuel consumption and production subsidies, contained in the zero draft, and a contact group was convened to work on the issue. Many delegations suggested referring to ‘inefficient’ subsidies, some to ‘harmful,’ and a few delegations called for deleting this target altogether.”

In the end, the goal has morphed into a Means of Implementation and the commitment is drastically watered down. The lobbying for fossil fuels was in full swing because while the fossil-fuel subsidy reform goal was ejected from the energy section, a Means of Implementation proposing access to clean energy research and technologies included “cleaner fossil fuel technologies” sitting within the energy goal. So goals emanating from “The Future We Want” now includes international cooperation and potentially support towards cleaner fossil-fuel technologies (more subsidies?) but no longer recognizes the need to phase out inefficient (and massive) fossil-fuel subsidies.

There are good reasons to phase out fossil-fuel subsidies which is why so many people around the world and governments have recognized that they need to go. They make no sense financially for governments who in many countries spend more on fossil-fuel subsidies than health and education budgets, and getting rid of them brings about savings and opportunities for future taxation of fuels that could lead to donor independence. They make no sense for the environment, would lead to reductions in emissions if removed. They make no sense from a social angle because they disproportionately benefit wealthier households and resources could be better targeted to the poor, such as through cash transfers. For a fully referenced article of why fossil-fuel subsidy reform makes sense for sustainable development, see here(an article based on the earlier version of the draft of the SDGs).

There is still a long way to go before the SDGs are finalized—likely another year. Countries and citizens need to redouble efforts to ensure that goals reflect not only existing G-20 and APEC commitments around fossil-fuel subsidy reform, but also the future that many people around the world have voted for, petitioned, raised, and really want. Goals that will enable countries to meet wider commitments to the environment, to people through creating fiscal space and taxation opportunities to deliver health and education, and to the poor—removing fossil-fuel subsidies would do all this and more.

For further information around sustainable development, the goals and fossil-fuel subsidy reform see Biores Volume 8 Number 6:
http://www.ictsd.org/bridges-news/biores/news/sustainable-development-and-fossil-fuel-subsidy-reform