G20 Nations Are Still Spending Billions of Dollars Supporting the Fossil-Fuel Industry

Much was made of the deal struck by international negotiators at the G20 summit in New Delhi last weekend, which included a heartening proposal for the countries to triple their renewable energy capacity by 2030. But that commitment lacked corresponding strong promises to phase out fossil fuels, a crucial necessity according to the U.N.’s global stocktake report on the world’s progress in fighting climate change. And buried in the leaders’ declaration, was one old goal, a ghost of climate summits past, which casts doubt on the ability of world politicians to put politics aside in the name of emissions cuts: to “phase out and rationalize, over the medium term, inefficient fossil-fuel subsidies that encourage wasteful consumption.”

That goal, to stop using public funds to tip the scales in favor of fossil fuels, is the no-brainer of no-brainers in fighting climate change: if we want to eliminate fossil fuels, a good first step would be to stop using taxpayer dollars to pull them out of the ground. The goal to begin phasing them out, with hefty caveats (notice we apparently only want to eliminate “inefficient” carbon subsidies) was first adopted by the G20 all the way back in 2009, and they’ve been punting the issue ever since.

In some sense it’s shocking the extent to which countries whose leaders talk a big game on climate, the U.S. not exempted, still financially support them. In fact, the U.S. is one of the biggest culprits, especially considering that with its relative wealth it could afford to offset the effect of cutting subsidies on energy prices for poorer citizens. Petro-states like Saudi Arabia and Russia are also among the worst offenders, spending huge amounts subsidizing fossil fuels compared to the size of their economies. And rather than falling in recent months, global fossil fuel subsidies actually nearly doubled between 2021 and 2022, according to the International Monetary Fund.

The likely reason for that was Russia’s invasion of Ukraine, and the corresponding shockwaves that the outbreak of war sent through the global energy system. That event does a good deal to illustrate why we’re still stuck forking over money to oil and gas extractors. Geostrategically, it pays for countries to keep onshore oil and gas extractors merrily pumping away, so no one can cut off your country’s supply. And cheap energy, as leaders in autocratic regimes like Iran would tell you, is just good politics. Cut subsidies in a way that hurts everyday working folk, and you might end up with riots in the street, as in Angola earlier this summer. 

Those dilemmas are no excuse for inaction, though. The New Delhi declaration said that leaders would “increase our efforts to implement the commitment [on subsidies] made in 2009.” Lacking was anything saying what those efforts might entail. For leaders, tough calls like phasing out subsidies can usually wait until the next year, or the next election cycle. Better yet, the next politician in power can deal with that headache. Putting it off worked just fine for the politicians over the past 14 years. It’s just the rest of us who have paid the price.

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