Sumary of The World’s Biggest Governments Are Still Propping up Fossil Fuels:
- Two things helped lower these subsidies: a sharp drop in consumption during the pandemic, and a significant drop in prices.
- Article content In a new report to the Net Zero Asset Owner Alliance, my colleagues at BloombergNEF have added up fossil fuel support from the G-20 governments.
- Their work shows that support to state-owned energy companies — often their countries’ sole energy supplier — constitutes 45% of total fossil fuel subsidies, while consumer subsidies are a little over 21%.
- In the five years from 2015 to 2019, G-20 governments provided $3.3 trillion of direct support to coal, oil and gas, and fossil fuel-fired power generation.
- Those amounts don’t track particularly well to the underlying cost of energy.
- Over that same five years, the spot price of Brent crude swung from less than $30 a barrel to nearly $90. This lack of alignment indicates that the connection between near-term energy prices and long-term support for energy is loose at best.
- Article content That’s not to say there’s been no progress at all in reducing support for fossil fuels in the G-20. Saudi Arabia, for instance, has cut its total support for fossil fuels by half since 2015 — but still provides nearly three times as much per capita as any other government.
- Fully half of those governments have supported fossil fuels less since 2015 — but then again, the law of averages means that at least some of the remaining half have raised theirs.