Shifting a portion of the massive subsidies dedicated to fossil fuels towards renewable energies would result in a huge push forward for the clean energy revolution, according to the latest report from the International Institute for Sustainable Development (IISD).
Each year, over $370 billion in support is focused on coal, oil, and gas, while just $100 billion is committed to renewables. It would take between 10 to 30 percent of fossil fuel subsidies to fund a global transition to green energy.
Governments need to reassess their priorities
Eliminating funding for fossil fuels has been viewed as an essential element towards dealing with the climate crisis. A decade ago, G20 nations pledged to reduce fossil fuel subsidies, though minimal progress has been made. Secretary General of the United Nations, António Guterres, opposed these subsidies, saying, “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.”
The new report reveals how utilizing a small section of fossil fuel subsidies could indisputably shift the balance towards clean energies, turning it into the most cost effective electricity available, and inevitably causing global ripple effects.
“Almost everywhere, renewables are so close to being competitive that [a 10 to 30 percent subsidy swap] tips the balance, and turns them from a technology that is slowly growing to one that is instantly the most viable and can replace really large amounts of generation,” says Richard Bridle of the IISD. “It goes from being marginal to an absolute no-brainer.”
However, in comparison with the immediate necessity of shifting to clean energy, the progress being made is simply inadequate “There is no question that renewables can power the energy system,” says Bridle. “The question now is: can we transition quickly enough away from fuels like coal? And subsidy reform is a very obvious step towards that.” According to Bridle, there aren’t a lot of methods of cutting emissions that result in governments saving money.
“Taking away subsidies from fossil fuels and channelling them towards clean energy would boost their development at a much faster pace, and help secure our climate goals,” said Ipek Gençsü from the Overseas Development Institute.