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fossil fuel subsidies
Scientists, Experts Demand 'Immediate End' to EU Fossil Fuel Subsidies
"E.U. leaders must make a choice: Stand with the people and the planet, or continue propping up an economy that's driving us towards climate catastrophe," said one advocate.
Oct 02, 2024
Warning that policymakers in the European Union are undermining the bloc's own climate goals by continuing to subsidize fossil fuel extraction, climate scientists and other experts from across Europe were among the signatories of an open letter released Wednesday, demanding that officials redirect hundreds of billions of dollars in subsidies to "turbocharge climate solutions."
The coalition United for Climate Justice spearheaded the letter, which comes ahead of a planned march in Brussels on Saturday, October 5.
"These subsidies go against Europe's plans for a sustainable and just transition and fuel the devastating heatwaves we have seen this past summer in our continent," reads the letter. "Europe is now the fastest warming continent; we have reached a turning point and cannot afford to delay any further."
Groups including Extinction Rebellion, 350.org, and Greenpeace E.U. pointed to goals the bloc has set in recent years, including the 8th Environmental Action Program, which entered into force in 2022 and included a commitment to "phasing out fossil fuel subsidies."
The subsidies, which were estimated at more than €400 billion ($441 billion) in 2023, also stand in the way of meeting climate targets put forward in the European Green Deal, said the signatories. The plan aims to make Europe "the first climate-neutral continent," with no net emissions of greenhouse gases by 2050 and "interim targets of reducing greenhouse gas emissions by 55% by 2030 and by 90% by 2040," notes the letter.
"This will not happen without an immediate phaseout of fossil fuel subsidies," said the groups bluntly, "as a step towards a fossil-free Europe."
By continuing to subsidize fossil fuel projects, they added, the E.U. is also flouting its own Parliament's declaration of a climate emergency in 2019.
To act in line with the declaration and its climate commitments, said the groups, the E.U. must:
- Set a timeline for the phaseout of fossil fuel subsidies by 2025, providing technical and financial assistance to member states
facing challenges in meeting phaseout deadlines and offer incentives for achieving milestones ahead of schedule; - Adopt comprehensive methodological guidance for member states that accurately and transparently accounts for both explicit and implicit subsidies associated with fossil fuels; and
- Develop a binding framework to monitor and report on member states' progress towards phasing out fossil fuel subsidies, with noncomplying members facing consequences such as financial penalties and reduced access to E.U. funding.
The bloc's fossil fuel subsidies "distort energy demand, perpetuate dependence on polluting energy sources, and undermine European energy security, while subsidizing industries that contribute significantly to greenhouse gas emissions," said the groups.
Phasing out the subsidies would "future-proof the European economy, reducing climate-related financial risks," they added.
The letter comes weeks after Storm Boris dumped record-breaking rains on European countries including Romania, Austria, and Poland, leading to deadly flooding.
"The E.U. cannot claim leadership on climate action while continuing to support polluting industries with billions," said Angela Huston Gold, spokesperson for United for Climate Justice. "E.U. leaders must make a choice: Stand with the people and the planet, or continue propping up an economy that's driving us towards climate catastrophe. The recent disastrous floods in Central and Eastern Europe are yet another wake-up call. We must end our fossil fuel dependency and therefore eliminate all fossil fuel subsidies."
Also last month, the Portuguese government declared a "state of calamity" over wildfires that killed at least seven people. Last year, the World Meteorological Organization (WMO) and the E.U.'s Copernicus Climate Change Service (C3S) determined the Europe is the fastest-warming continent.
"Year after year, commitments have been made and left unfulfilled, and we can no longer accept inaction," said the signatories of Wednesday's letter, who also included Luca Mercalli, president of the Italian Meteorological Society, and Paul Stubbs of the Institute of Economics in Croatia. "Until these necessary changes occur, people will continue to take to the streets to make our voices heard and hold you accountable."
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Ending Oil Subsidies, Taxing the Rich Could Help Free Up $5 Trillion a Year for Climate
"The real question isn't whether we can afford to act, but whether we can afford not to."
Sep 24, 2024
Research published Tuesday estimates that rich countries could mobilize over $5 trillion a year for climate action worldwide by cutting off subsidies to the oil and gas industry, imposing a levy on big polluters, and cracking down on tax evasion by large corporations and the rich.
The new report from Oil Change International (OCI) was released as world leaders gathered in New York City for high-level United Nations General Assembly talks, a meeting that comes less than two months before the COP29 climate summit in Azerbaijan.
OCI's research, which includes a fact sheet outlining various proposals to raise funds for climate action, stresses that "there is no shortage of public money available for rich countries to pay their fair share on fair terms for climate action at home and abroad."
"The urgency and extent of growing economic inequality, unfair sovereign debt crises, climate disasters, and fossil fuel profits have created significant momentum towards many of these measures in international and domestic policy spheres," OCI's research brief notes. "Finance has been in the spotlight in most major international political fora in the past few years in recognition that our current financial architecture is a major driver of these overlapping crises."
Among the proposals laid out in OCI's brief are an equitable end to "public finance, direct subsidies, and state-owned company investments in fossil fuels," which could raise $846 billion a year globally; a "climate damages tax" on fossil fuel extraction, which could raise $618 billion a year; a 25% minimum corporate tax rate, which could raise $479 billion annually; and a wealth tax on billionaires, which could raise roughly $2.60 trillion a year in the Global North and over $5.6 trillion worldwide.
Laurie van der Burg, OCI's public finance lead, said that the rich nations most responsible for the climate emergency "owe this money to Global South countries that have not caused this crisis and need fair finance to deliver strong climate plans next year that phase out fossil fuels."
"This is essential to avoid climate breakdown and save lives," she added.
The clock is ticking ⏰ Rich nations must deliver a roadmap for at least $1 TRILLION/year by 2025. No more empty promises. It's time to pay up for a just transition! 💚
Read the full report: https://t.co/eKwm0zXits pic.twitter.com/4qjTO5JQ8c
— Oil Change International (@PriceofOil) September 24, 2024
The COP29 climate summit will take place a year after nations agreed at COP28 to transition "away from fossil fuels in energy systems" in a "just, orderly, and equitable manner."
The success of that pledge, OCI said, depends on rich nations contributing massively to global climate finance after years of falling short of their pledges and continuing to expand fossil fuel extraction and handouts. Worldwide, environmentally harmful subsidies—including fossil fuel subsidies—have surged to $2.6 trillion a year, according to a report released last week.
"Global North countries have a responsibility to redirect their share of these subsidies in support of climate action," OCI said Tuesday.
The new report comes on the heels of a record-hot summer and amid devastating extreme weather, from massive flooding across Europe and Africa to wildfires in South America.
Andreas Sieber, associate director of policy and campaigns at 350.org, said Tuesday that "the real question isn't whether we can afford to act, but whether we can afford not to."
"It is a bitter irony that rich nations hide behind claims of fiscal restraint, yet trillions are still spent on fossil fuel subsidies and militarization," said Sieber. "The truth is simple: the money exists, but the political will does not. By treating climate finance as a zero-sum game, wealthy countries not only deepen global inequality but also undermine their own futures."
"The energy transition isn't charity—it's an investment in global stability and security," Sieber added. "Ignoring the need for support only worsens the climate crisis, which knows no borders."
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'Colossal Waste': US Leads Way in Public Spending on False Climate Solutions
"The fossil fuel industry delays climate action, distracts from real solutions that would end the fossil fuel era, and does everything in its power to squeeze the last drops of profit from a dying industry, at the expense of all of us."
Aug 29, 2024
Among the world's wealthiest countries, the U.S. leads the way in spending public money on so-called climate "solutions" that have been proven to "consistently fail, overspend, or underperform," according to an analysis released Thursday by the research and advocacy group Oil Change International.
The group's report, titled Funding Failure, focuses on international spending on carbon capture and fossil-based hydrogen subsidies, which continues despite ample data showing that the technological fixes have "failed to make a dent in carbon emissions" after 50 years of research and development.
The report details how five countries account for 95% of all carbon capture spending, with the U.S. investing the most taxpayer money in the technology, at $12 billion in subsidies over the last 40 years.
Norway comes in second with $6 billion going to carbon capture and storage, while Canada has spent $3.8 billion, the European Union has spent $3.6 billion, and the Netherlands has poured $2.6 billion into the technology, with which carbon dioxide emissions are compressed and utilized or stored underground.
"It is nothing short of a travesty that funds meant to combat climate change are instead bolstering the very industries driving it."
Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, toldThe Guardian that the subsidies amount to a "colossal waste of money."
"It is nothing short of a travesty that funds meant to combat climate change are instead bolstering the very industries driving it," said Singh.
While proponents claim carbon capture and storage reduces planet-heating carbon emissions, OCI notes, it was originally developed in the 1970s "to enhance oil production, and this remains its primary use," with the technology "barely" reducing emissions.
High-profile carbon capture failures in the U.S. include the Petra Nova project in Houston, Texas, which cost nearly $200 million in taxpayer funds and whose captured emissions were later used for crude oil production, and the FutureGen project, "which swallowed $200 million and never materialized."
"Investing in carbon capture delays the transition to renewable energy," reads OCI's report. "Instead of wasting time and money on technologies that do not work, governments must commit to justly and urgently phasing out fossil fuels before it's too late."
Despite the lack of data supporting the use of carbon capture, the group said, countries including the U.S. are "preparing to waste hundreds of billions of taxpayer dollars on these ineffective technologies, further benefiting the fossil fuel industry."
OCI highlighted how the U.S. and Canada, while ostensibly fighting the climate crisis, have spent a combined $4 billion in public money to explicitly "pay oil companies to produce more oil," with the subsidies going to carbon capture for "enhanced oil recovery."
The report also found that in addition to the $12 billion in taxpayer funds the U.S. has spent on carbon capture and fossil hydrogen—a leak-prone gas produced through energy-intensive processes that cause their own emissions—the government has spent an estimated $1.3 billion on the 45Q tax credit, which allows companies to write off tax for every ton of carbon dioxide they store underground.
The Inflation Reduction Act (IRA) increased the amount given to companies in 45Q tax credits from $35 to $60 per ton, meaning that the subsidy could grow to over $100 billion in the next 10 years.
OCI's Policy Tracker shows that overall public spending on carbon capture and hydrogen could grow by between $115 billion and $240 billion in the coming decades.
"We need real climate action, not fossil fuel bailouts!" said OCI in a post on social media.
The group's report also highlights that fossil fuel giants such as ExxonMobil have shifted from carbon capture skeptics to outspoken proponents of the technology—with the company bragging to investors that carbon capture and hydrogen would help its Low Carbon Business Unit make "hundreds of billions of dollars" and grow to be "larger than ExxonMobil's base business."
Exxon didn't launch its carbon capture efforts until 2018, having spent several years and hundreds of millions of dollars on another "climate solution" that ultimately failed: the use of algae to make biofuels.
Since then, Exxon has "pushed for direct government funding for carbon capture, particularly at the U.S. Department of Energy (DOE)," successfully lobbying for $12 billion allocated in the Bipartisan Infrastructure Bill in 2021 for "carbon management research, development, and demonstration."
Exxon also lobbied for the increased rate of the 45Q tax credit in the IRA and "played a 'central role' in drafting a 2019 DOE-sponsored report on carbon capture that determined Congress would need to create an incentive of around $90 to $110 per ton to support carbon capture deployment," according to OCI.
The Guardian on Thursday reported that Exxon still "chases billions in U.S. subsidies for a 'climate solution' that helps drill more oil," describing how the oil giant hosted an event at the Democratic National Convention earlier this month where senior climate strategy and technology director Vijay Swarup praised the IRA for helping Exxon pursue carbon capture and said: "We need new technology and we need policy to support that technology. We need governments working with private industry."
Exxon's enthusiasm for carbon capture, said OCI, is an example of how "the fossil fuel industry delays climate action, distracts from real solutions that would end the fossil fuel era, and does everything in its power to squeeze the last drops of profit from a dying industry, at the expense of all of us."
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