G8 must phase out fossil fuel subsidies

G8 countries should phase out fossil fuel subsidies and increase support for renewable energy and energy saving projects, according to the Institute for Public Policy Research (IPPR).

In their report, Catalysing commitment on climate change, the IPPR has highlighted the massive fossil fuel subsidies available from governments and international financial institutions, and then compared these with the total lack of such support for renewable energy and energy saving projects.

For instance, last year, the World Bank provided US $1.7 billion of support for alternative energy projects – out of a total of US $12 billion given to energy projects in general.

The organisation has, therefore, advised the governments of G8 countries to establish a coalition of willing industrialised and developing countries to increase international investment in renewable energy and energy saving technologies, done through:

  • Requiring national Export Credit Agencies (ECAs) and multilateral banks to need energy audits and minimum energy efficiency standards for the projects they support
  • Improving the terms of ECA support for renewable energy projects so that they are at least as good as those for fossil fuels
  • Substantially increasing the World Bank target to grow its investment in renewable energy
  • Building capacity for deploying renewable energy and energy saving technologies in developing countries

    Implementation of stricter carbon controls and reporting regulations for organisations on their environmental contributions and polluting activities, encouraging investors to take more notice of long-term climate risks in their investments were also advised, along with other measures.

    “It is time for governments to put a stop to the multi-billion dollar handouts given to the fossil fuel industry,” IPPR research fellow Simon Retallack urged.

    “To prevent dangerous climate change, the playing field urgently needs to be lefelled so that clean, renewable energy technologies can compete fairly.”

    By Jane Kettle

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