Pressure Mounts for a G20 Timeframe for Fossil Fuel Subsidy Elimination
Source: Small Island Developing States
Headline: Pressure Mounts for a G20 Timeframe for Fossil Fuel Subsidy Elimination
23 April 2017: The Vulnerable Twenty (V20) Group and the Group of Twenty (G20) have stressed the importance of eliminating fossil fuel subsidies. In a related development, a group of investors and insurers has called on the G20 to adopt a clear timeframe for phasing out subsidies and public finance for fossil fuels.
The V20 meet in a first-ever dialogue with High Level representatives of the G20 on 23 April 2017, in Washington DC, US. According to the Chair’s summary of the dialogue, both groups indicated an interest in working together on climate change, including through the “ambitious implementation” of the Paris Agreement.
The Chair’s summary also indicates that members present at the meeting highlighted “the importance of removing inefficient fossil fuel subsidies” that are inconsistent with sustainable development. Participants also “strongly supported” the decision by V20 countries to establish carbon pricing in their countries by 2025.
The Climate Vulnerable Forum (CVF) is a partnership of 43 developing countries that are highly vulnerable to the impacts of climate change. It serves as a South-South cooperation platform for member countries to coordinate action on climate change.
Members include the following countries: Afghanistan, Bangladesh, Barbados, Bhutan, Burkina Faso, Cambodia, Comoros, Costa Rica, Democratic Republic of the Congo, the Dominican Republic, Ethiopia, Fiji, Ghana, Grenada, Guatemala, Haïti, Honduras, Kenya, Kiribati, Madagascar, Malawi, Maldives, Marshall Islands, Mongolia, Morocco, Nepal, Niger, Palau, Papua New Guinea, Philippines, Rwanda, Saint Lucia, Senegal, South Sudan, Sri Lanka, Sudan, Tanzania, Timor-Leste, Tunisia, Tuvalu, Vanuatu, Viet Nam and Yemen. [Chair’s Summary of the V20-G20 Dialogue]
In a related development, investors and insurers with more than US$2.8 trillion in assets under management have also urged the Governments of the G20, when they meet at the July 2017 G20 Summit in Hamburg, to establish “a clear timeline for the full and equitable phase-out by all G20 members of all fossil fuel subsidies by 2020, starting with the elimination of all subsidies for fossil fuel exploration and coal production.”
The statement welcomes the call by the G7 for all governments to phase out fossil fuel subsidies by 2025. It notes that subsidies and public finance supporting the production and consumption of fossil fuels are “a key concern to the finance sector,” stressing that they are “notoriously inefficient” and “increase the risk of stranded fossil fuel assets, decrease the competitiveness of key industries, including low‐carbon businesses, and negate the carbon price signals many of us have been calling for.” The statement further notes that these subsidies damage public health and fail to increase energy access. [Investors and Insurers’ Statement to the G20]