International Institute for Sustainable Development warns fossil fuel subsidies continue to far outstrip renewable subsidies, suffocating the clean energy transition
Switching fossil fuel subsidies to support renewables could unleash a clean energy revolution and propel the decarbonisation of the global economy, according to a new report from the International Institute for Sustainable Development (IISD).
Despite G20 nations pledging every year since 2009 to phase out unnecessary fossil fuel subsidies, they continue to far outstrip equivalent support for renewable resources.
Coal, oil, and gas currently receive more than $370bn a year, the IISD study finds - almost four times the $100bn of comparable support for renewables.
Much of this subsidy is concentrated in prominent oil-producing countries, such as Saudi Arabia, and coal-using countries, such as Indonesia, which caps the cost of the fuel at 75 per cent of the market rate, the study shows. Such findings echo those of a recent REN21 report, which showed 112 nations subsidise fossil fuel prices.
Conversely, if just 10 to 30 per cent of such subsidies were switched to renewables, it would provide sufficient funds to pay for a global transition to clean energy, the IISD analysis concludes.
"Almost everywhere, renewables are so close to being competitive that [a 10-30 per cent subsidy swap] tips the balance, and turns them from a technology that is slowly growing to one that is instantly the most viable and can replace really large amounts of generation," said Richard Bridle of the IISD. "It goes from being marginal to an absolute no-brainer."
The new report builds on previous IISD findings, including a 2018 study of 20 countries with large fossil fuel subsidies which found a 30 per cent swap to renewables would trigger an emissions reduction of between 11 and 18 per cent.
It adds to a growing sense of urgency around the issue, which was highlighted by UN secretary general António Guterres in May. "What we are doing is using taxpayers' money - which means our money - to boost hurricanes, to spread droughts, to melt glaciers, to bleach corals. In one word: to destroy the world," he said at the time.
