Fossil-Fuel Subsidies Must End
When it comes to tackling the climate crisis, ending $400 billion of annual subsidies to the fossil-fuel industry worldwide seems like a no-brainer. For the past decade, world leaders have been resolving and reaffirming the need to phase them out. All of the 2020 Democratic presidential candidates have committed to eliminating fossil-fuel subsidies, and the vast majority of the American public supports doing so. International financial institutions such as the World Bank and International Monetary Fund have joined the chorus, pointing to the benefits of reform.
In 2018, however, a group of researchers questioned the magnitude of the climate benefits of subsidy reform, reporting that their simulations showed its effect would be “limited” and “small.” Stories in the press began asking whether such subsidies are such a big deal after all.
We think this is wrong. In a new paper in the journal Nature, we make the case that they do matter—a lot. In the 2018 study, emissions reductions from subsidy removal were calculated by the researchers to be five hundred million to two billion metric tons of carbon dioxide per year by 2030. This figure is by no means “small.” It amounts to roughly one quarter of the energy-related emission reductions pledged by all of the countries participating in the Paris Agreement (four to eight billion tons). Hundreds of millions of metric tons of CO2 reductions is nothing to sneeze at, particularly when it can be achieved by a single policy approach that also brings strong fiscal, environmental and health benefits.
Moreover previous work has likely underestimated the emissions reductions that would occur, because commonly used techniques do not accurately capture the investment dynamics of fossil fuels. But these dynamics can greatly affect what oil and gas companies do.
https://blogs.scientificamerican.com/observations/fossil-fuel-subsidies-must-end/
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