Energy Subsidies - International

Donald Trump won the US presidency railing against “job-killing regulation” and promising to put coal miners back to work. Delivering against this promise is proving difficult: US high-cost coal is crowded out not just by increasingly low-cost renewables, but also by shale gas and lower-cost coal from other countries.

On Thursday, 11 May 2017, the event, ‘Scaling Up Green Energy Finance: Swapping Fossil Fuel Subsidies for Sustainable Energy Solutions, was presented by the IISD Global Subsidies Initiative (GSI), the Government of Denmark, the Nordic Council of Ministers (NCM) and the Friends of Fossil Fuel Subsidy Reform (FFFSR) in Bonn.

Phase-out and reallocation of fossil fuel subsidies (FFS) is a low-hanging fruit for financing and implementing SDGs. First, it has a diverse support base of both sustainable development advocates and “government downsizers.” Second, instead of requiring financing like many sustainable development policies, it could free up hundreds of billions of dollars for implementing multiple SDGs.

Phase-out and reallocation of fossil fuel subsidies (FFS) is a low-hanging fruit for financing and implementing SDGs. First, it has a diverse support base of both sustainable development advocates and “government downsizers.” Second, instead of requiring financing like many sustainable development policies, it could free up hundreds of billions of dollars for implementing multiple SDGs.

The combined impact of fossil fuel subsidy reform (FFSR) and an increase in gasoline and diesel fuel taxation could do three things: save and raise money for governments; reduce emissions; and provide upfront and ongoing domestic resources to fund sustainable development and the sustainable energy transition.

G20 Energy Ministers meet on the 29th of June in Beijing to discuss the major energy policy challenges facing the group. A key area of discussion is fossil fuel subsidy reform.

For decades, the trajectories of fossil fuel subsidies and world trade have been closely interwoven.