Posted June 29, 2010

Global energy and climate change challenges were among the topics addressed by leaders at the G-20 Summit in Toronto June 26-27. This included the reaffirmation of groundbreaking commitment made by G-20 Leaders at the 2009 Pittsburgh Summit to phase out fossil fuel subsidies. The G-20 Leaders who have associated with the Copenhagen Accord also reaffirmed their commitment to implement the Accord, and work with countries around the world to carry out the Accord's provisions on reducing emissions, promoting clean technologies, mobilizing financing and ensuring the transparency of national efforts.

According to information released by the White House, phase-out of subsidies for fossil fuels will encourage the energy conservation, improve energy security, reduce economically inefficient burdens on budgets, and provide a down-payment on the commitment to reduce GHG emissions.

In remarks given at a G-20 Press Conference in Toronto, President Barack Obama spoke about the renewed commitment to phase out fossil fuel subsidies. "The United States has laid out our plans for achieving this goal, and we're urging our G-20 partners to do so as well," he said. "This would be one of the most important steps we can take to create clean energy jobs, increase our energy security and address the threat of climate change."

G-20 Leaders at the Pittsburgh Summit committed to rationalizing and phasing out inefficient fossil fuel subsidies over the medium term. Since Pittsburgh Summit took place in Sept. 2009, G-20 countries have developed country strategies and timeframes for review and taken action on a joint report on the scope and impact of global fossil fuel subsidies. In January the G-20 established an experts working group on energy that includes participation from all 20 countries. These energy experts have taken the initial steps to review the fossil fuel subsidy programs in their own countries, and develop strategies and timeframes for rationalizing and phasing out inefficient fossil fuel subsidies.

In addition, as requested by the G-20 leaders, the International Energy Agency, Organization of Petroleum Exporting Countries, Organization for Economic Cooperation and Development, and the World Bank will soon publish a joint report that analyzes the scope of global energy subsidies and offers recommendations for rationalization and phase out. According to the White House, that report has found that fossil fuel subsidies displace important public investments and drain government finances, worsen balance of payments, lead to underinvestment in infrastructure, and can contribute to energy shortages. The report estimates that fossil fuel consumption subsidies cost the global economy $557 billion in 2008, and do not provide meaningful, widespread benefits to low-income households.

This article originally appeared at www.industrialghg.com