Nov 1, 2022
G-20 Spent Almost $700 Billion Supporting Fossil Fuels Last Year
, Bloomberg News
(Bloomberg) -- The Group of 20 nations spent $693 billion supporting the fossil fuel industry last year, slowing progress towards global climate goals, according to a report released by Bloomberg Philanthropies and BloombergNEF on Tuesday.
The money from governments and state-owned institutions “distorted prices, encouraged potentially wasteful use and production of fossil fuels, and resulted in investment into long-lived, emission-intensive equipment and infrastructure,” BNEF analysts Victoria Cuming and Maia Godemer wrote in the Climate Policy Factbook: COP27 Edition.
The aid for oil, gas, coal and fossil-fuel power rose 16% from 2020 and was the highest since 2014, according to the provisional estimates.
Setting a carbon price that forces companies and consumers to pay for their emissions is a crucial step toward meeting Paris Agreement commitments, but most efforts haven’t been effective because prices are too low or concessions offered to polluters too generous, according to the report. Governments must also enforce climate-risk disclosure from companies and financial institutions.
The increased funding was driven by retail energy price subsidies, tax breaks and budgetary transfers. Although the share of G-20 support for the dirtiest fossil fuel, coal, is shrinking — it fell to 2.9% last year from 4.1% in 2016 — it still attracted $20 billion worth of aid in 2021. China accounted for the largest share of G-20 fossil fuel support in 2020, a trend that probably extended into last year, according to BNEF, which hasn’t yet released country-level data for this year.
Despite announcing a range of ambitious commitments to phase out fossil fuel subsidies G-20 and G-7 members “always seem to include imprecise language and caveats, giving governments wiggle room to interpret these pledges as they wish,” Cuming said in a separate statement. Bloomberg Philanthropies is the philanthropic organization of Michael Bloomberg, the founder and majority owner of Bloomberg LP, which owns Bloomberg News and BNEF.
The analysis comes ahead of the global climate summit COP27 that starts Nov. 6 in Egypt. Negotiations there are expected to focus on how to meet emissions pledges and targets announced at the previous year’s conference in Glasgow last year.
©2022 Bloomberg L.P.
