The world’s largest economies, the G20, will provide a record $1.4 trillion in public funding for fossil fuels in 2022, despite pledges to cut spending, a new study by a think tank says.
“The energy price crisis triggered by Russia’s invasion of Ukraine in 2022 would lift public financial support for fossil fuels to new levels,” the International Institute for Sustainable Development (IISD) said in its analysis. fan the flamesreleased on Wednesday.
The Canada-based group said the amount was more than double the pre-pandemic and energy crisis levels in 2019 and more than four times the annual average for the past decade.
When fossil fuels are burned, they release harmful pollutants that contribute to global warming and exacerbate extreme weather events. They also pollute the air with toxins that damage our respiratory systems and other vital organs, killing millions of people every year.
Of this, the lion’s share of $1 trillion is fossil fuel subsidies, $322 billion is state-owned enterprise investment, and another $50 billion is loans from public financial institutions.
“While much of this is support for consumers, about a third ($440 billion) is driving investment in new fossil fuel production,” the report said, adding that such support “turns the world off from fossil fuels. Perpetuating reliance on carbon dioxide, paving the way for more fossil fuel production.” Market volatility and geopolitical security risks lead to energy crises. “
Tara Laan, a senior fellow at the International Institute for Sustainable Development and lead author of the study, said: “These figures are a stark reminder that despite the increasingly damaging effects of climate change, G20 governments are continuing to Pour a lot of public money into fossil fuels.”
Increased investment runs counter to commitments made clear in the 2015 Paris Agreement, the IISD said. Such continued investment in fossil fuels significantly hinders the chances of meeting climate goals because they boost greenhouse gas emissions and lower the cost of renewable energy. benefit.
G20 countries should shift their financial investments away from fossil fuels towards targeted, sustainable social protection and support for renewable energy expansion, the report said.
The report comes ahead of a key G20 leaders meeting in New Delhi on Sept. 9-10, where climate change consensus is expected to be discussed. The meeting could set the tone for the United Nations’ COP28 climate change conference in Dubai in November.
The report praised the achievements of G20 presidency India, which has cut fossil fuel subsidies by 76% from 2014 to 2022, while substantially increasing support for clean energy.
IISD urged G20 leaders to eliminate fossil fuel subsidies in developed countries by 2025 and in all other countries by 2030.
Two years ago, world leaders agreed at the COP26 climate summit in Glasgow to phase out “inefficient” fossil fuel subsidies.
“International public financing for fossil fuels has declined in recent years but remains nearly four times higher than support for clean energy,” the report said, adding that financing took the form of international aid, export credit support and concessional financing , such as equity, grants, loans, and loan guarantees.
In absolute dollar terms, China is one of the top four providers of international public financing for fossil fuels, providing $6.7 billion annually between 2019 and 2021.
Japan provided $10.6 billion and Canada $8.5 billion. South Korea came in third with investments of $7.3 billion.
The most supported fuel was oil and gas at 88%.
The report also pointed out that G20 countries have announced more than US$25 trillion in subsidies for renewable energy generation between 2020 and June 2023, with the United States, Germany and China leading the way.
“Renewable energy subsidies, while aggressive, pale in comparison to fossil fuel subsidies, which exceed $1.4 trillion over the three-year period 2020-2022,” the report said.
The IISD also said that while global renewable energy investment hit a record $500 billion in 2022, it was still only about half that of fossil fuel investment.
Edited by Mike Fern and Tai Junkang.
