G20 Countries Spent Nearly 700 Billion USD to Support Fossil Fuels in 2021.

2 Nov 2022.

Introduction:

On November 1, 2022, the Climate Policy Factbook was released by BloombergNEF and Bloomberg Philanthropies.

What are the key findings of the factbook?

• The G20 countries continued to provide substantial financial aid for fossil fuel production and consumption in 2021.
• In 2021, the financial aid provided for the fossil fuel reached the highest level since 2014, threatening the Paris Agreement’s commitment to limit greenhouse gas emissions.
• Nearly 700 billion USD worth of subsidies were provided by the G20 members for coal, oil, gas and fossil-fuel industries in 2021.
• This has increased investments in emission-intensive equipment and infrastructure and promoted the inefficient fossil fuel consumption and production.
• Coal’s share of G20 fossil fuel support is slowly declining. It fell to 2.9 per cent in 2021 from 4.1 per cent in 2016. However, 20 billion USD was invested for coal in 2021. This comes despite the growing efforts to phase out the coal. The recent G20 conference and COP26 pledged to phase out this fuel.
• China contributed to the highest share (26 per cent) of fossil fuel subsidy in 2020. However, it is lesser than other G20 members on a per capita basis. The country is behind Saudi Arabia, Argentina and Canada when per capita fossil fuel subsidy is considered.
• In 2020, Canada more than doubled its support for fossil fuels. The United States’ fossil fuel subsidies increased by 57 per cent in 2020 when compared to 2016.
• Though policymakers have recognized the threat posed by climate change on financial stability, only the European Union and the United Kingdom have passed laws or regulations requiring national-level disclosure of climate-risk information for investors. Currently, majority of G20 countries are only launched pilot programmes and released voluntary guidelines.
• Only 12 G20 countries are currently implementing national carbon pricing. A realistic carbon pricing is vital for making companies and consumers accountable for the greenhouse gas emissions.