A Dutch-led coalition of a dozen nations committed on Saturday to publish an inventory of their own fossil fuel subsidies within a year, with the aim of creating a clear strategy for eliminating them.
Governments agreed at the 2021 UN climate summit in Glasgow to phase out “inefficient” fossil fuel subsidies to help tamp down global warming.
But individual countries were left to decide for themselves how to do this.
Global subsidies for fossil fuels have since soared, rising by $2 trillion over the past two years to hit a record $7 trillion in 2022, according to the International Monetary Fund (IMF).
“We cannot phase out fossil fuels without tackling fossil fuel subsidies,” said Dutch climate minister Rob Jetten at the UN climate summit COP28 in Dubai. “We must ensure the right economic incentives are in place.”
The Dutch-led voluntary agreement provides the building blocks for disposing of such subsidies, which are typically employed to help protect consumers by keeping fuel prices low – especially amid energy price crises.
It was backed by Antigua and Barbuda, Austria, Belgium, Canada, Costa Rica, Denmark, Finland, France, Ireland, Luxembourg and Spain.
China, which did not join the new coalition, last year provided $2.2 trillion in fossil fuel subsidies, amounting to 12.5% of the country’s total GDP, the IMF found.
The US, which the IMF estimates spent around $760 billion on fossil fuel subsidies in 2022, also did not sign on.
Earlier this year, Canada released its own plan to eliminate inefficient fossil fuel subsidies – the only G20 country yet to do so and the world’s fourth-largest oil and gas producer.
The coalition would see countries share best practices for getting rid of subsidies, and develop national phase-out strategies.
“By eliminating subsidies, governments are better able to direct support towards clean economic growth and innovation,” said Canadian environment minister Steven Guilbeault in a statement on Saturday.
– Reuters