GRFA calls on national governments to end fossil fuel subsidies

By Global Renewable Fuels Alliance | February 18, 2016

Bliss Baker, the president of the Global Renewable Fuels Alliance, recently called upon national leaders to take advantage of the low price and abundant stockpiles of crude oil to eliminate fossil fuel subsidies. Baker pointed to the latest figures from the International Energy Agency that estimated global fossil fuel subsidies to be worth $490 billion, and outlined how global oil demand is forecast to drop by 25 percent in 2016 to 1.2mb/d.

Fossil fuel subsidies are theoretically intended to increase energy access during periods of high prices, but with the current state of global energy markets these subsidies are only succeeding in discouraging investment in energy efficiencies and renewables.

“The persistent oversupply of oil, and the resulting low prices, gives countries an opportunity not seen in recent memory to eliminate fossil fuel subsidies and encourage a transition to viable low-carbon energy sources like ethanol,” Baker said. “World leaders couldn’t ask for better circumstances to take action,” he added.

At the recently concluded Conference of the Parties to the UN Framework Convention on Climate Change (COP 21) in Paris, a landmark agreement on combating climate change was reached. The deal aims to ensure that the global temperature rise this century does not exceed 2°C above pre-industrial levels by shifting to a low carbon global economy and encouraging the development of clean technologies as the basis for future development.

Over the past year, almost 30 countries have reduced their fossil fuel subsidy programs. These changes have been made in recognition of the fact that the current low price of oil reduces the impact of eliminating consumer fossil fuel subsidies, and that their removal results in lower domestic national emissions of greenhouse gases.

“It is blatantly counter productive for governments to continue to subsidize the industry that contributes the majority of global greenhouse gas emissions, especially after 195 countries agreed that drastically cutting back GHG emissions was necessary to combat climate change” Baker said. “It’s time to take the brakes off of clean technology development and meaningfully begin the transition to a sustainable future,” he concluded.