To fight climate change fossil fuel subsidies must be cut
The method results in a 170/country, 30 year/span database that can help gauge the impact of those subsidies on emissions.
Threatened by climate change, governments the world over are attempting to nudge markets in the direction of less carbon-intensive energy.
Subsidies to fossil fuels have been accused of encouraging wasteful consumption which in turn creates more carbon emissions.
Many of these governments continue to subsidize fossil fuels, distorting markets and raising emissions. Determining how much money is involved is difficult.
According to Radek "The resultant 170-country, 30-year database finds that the financial and the environmental costs of such subsidies are enormous- and steadily increasing.
"The overwhelming majority of the world's fossil fuel subsidies stem from China, the U.S. and the ex-USSR; as of 2010, this figure was $712 billion or nearly 80 per cent of the total world value of subsidies. For its part, Canada has been subsidizing rather than taxing fossil fuels since 1998.
"By 2010, Canadian subsidies sat at $13 billion, or 1.4 per cent of GDP. In that same year, the total direct and indirect financial costs of all such subsidies amounted to $1.82 trillion, or 3.8 per cent of global GDP."
According to the report, aside from the money saved, in 2010 a world without subsidies would have had carbon emissions 36 per cent lower than they actually were.
Any government looking to ease strained budgets and make a significant and cheap contribution to the fight against climate change must consider slashing fossil fuel subsidies. As the data show, this is a sound decision – fiscally and environmentally. ■