Renewable Energy Subsidies & Fossil Fuel Phase-Out

For the past 60 years kerosene in India has primarily been available as a subsidized commodity for households as an affordable cooking and illumination (lighting) fuel. The report finds that subsidizing kerosene fails to meet the objective of providing affordable cooking and lighting service to households. There is a clear case for alternatives to replace kerosene for its end services that could include any of the following: off-grid lighting, clean cooking provision or a direct benefit transfer for kerosene (DBT-K).

20-21 April—Beijing—Coal remains central to the energy sector in China despite the impact on air pollution and greenhouse gas emissions. Recognizing the problems associated with coal use, China has embarked on a programme to gradually reduce the role of coal and develop cleaner forms of energy.  A key first step to breaking the hold of coal on the energy sector is to stop providing subsidies to the industry.

On 29 February 29 2016, India’s Finance Ministry released its 2016 budget, with important implications for clean and efficient energy. The budget pledges to reform subsidies and taxes provided to fossil fuels, which will do much to support renewable and more efficient energy. This is welcome as India seeks to do its part to meet the climate change commitments made in Paris last year.

The Government of India claims to have saved over 2 billion dollars in the first year of the operation of its direct benefits transfer scheme for LPG (DBTL). This policy brief tests this claim.

16 February 2016—Geneva—The Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) hosted a webinar on the climate change impacts of USD 500 billion of government subsidies to fossil fuels. The webinar was chaired by Peter Wooders, Group Director, Energy, IISD, who outlined the importance of fiscal instruments and mitigation efforts in light of the UNFCCC agreement and the ambitious efforts of the Friends of Fossil Fuel Subsidy Reform in promoting an international communiqué on the issue.

This study reviews deployment subsidies for onshore wind in two countries, Germany and China. Its primary goal is to better inform debates about cost-effectiveness by exploring the methods required to assess cost-effectiveness and by estimating the general magnitude and range of benefits in several key areas.

World leaders hailed that the climate change agreement, agreed on Saturday 12 December, was important and significant in terms of setting the framework for government action in the coming years. In this blog, the Global Subsidies Initiative (GSI) examines both the text of the agreement as well as the events and activities that took place throughout COP21 in Paris with regards to fossil fuel subsidy reform and the phased removal of around US$600 billion of government subsidies to fossil fuels. In summary, there was much momentum on the side-lines of the negotiating process. The content of the agreement itself, from the perspective of moving the issue of fossil fuel subsidy reform, is also a very positive step in the right direction for setting the framework and rules of the game on climate action.