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According to a new report, a green transition is possible if 10 percent of subsidies for fossil fuels are redirected towards clean renewables. Reallocating only a small fraction of fossil fuel cash towards clean energy would be able to eliminate a significant amount of carbon emissions responsible for driving the current climate crisis.
The coal, oil and gas industry is propped up by more than USD$370 billion every year compared to only around $100 billion for the clean renewables sector. Subsidies are most common in oil-producing states such as Saudi Arabia and coal-powered countries like Indonesia.
In a new report by the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD), just 10% to 30 % of the annual subsidies that go to fossil fuels could pay for a worldwide transition to clean energy.
This “subsidy swap” would not only open up the possibility of a green energy revolution, but could also help save taxpayers’ money that can be better spent elsewhere. Dirty energy subsidies, which costs the government and taxpayers, are often inefficient and undermines the budding alternative energy sector.
IISD Senior Policy Advisor Richard Bridle said: “All countries should be looking to identify where swaps can kickstart their clean energy transitions.”
For many, these recent findings come as no surprise. Tackling coal, oil and gas industry subsidies has for years been a task that many environmental activists and organisations have called for to tip the balance in favour of green energy. Despite G20 nation-states pledging to phase fossil fuels out in 2009, real advancements have remained limited.
“What we are doing is using taxpayers’ money – which means our money – to boost hurricanes, to spread droughts, to melt glaciers, to bleach corals. In one word: to destroy the world,” said United Nations Secretary General António Guterres.
Such a reallocation could prompt a global rollout of renewables. Currently, renewable energy supplies are competing against fossil fuels at such a close margin that subsidies would effectively make green energy the cheapest electricity available over fossil fuels.
There is little question that the renewable energy sector is developed enough to power the world’s energy system – Asia’s renewable energy capacity has almost doubled in five years and has proved a powerhouse for global implementation – but rapid action is necessary in order to cut emissions quickly enough in a climate emergency. The report’s proposed subsidy reforms could lead to emissions reductions of 11 to 18 percent, which has the potential to ease global heating.
Removing fossil fuel subsidies would also come with additional social and economic advantages, making it a no-brainer. It would improve air quality by reducing pollution, and therefore ease the burden on public health spending. According to the International Monetary Fund’s (IMF) estimates, ending subsidies would halve the number of premature death caused by air pollution.
Lead image courtesy of Pexels.