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Why we hate fossil fuel subsidies and how you can help end them

Burning oil-gas by the SAKHALINNEFTEGAZ state company © Vladimir Filonov / WWF-CanonAlmost $1trillion is given to the fossil fuel industries in subsidies every year © Vladimir Filonov / WWF-Canon

If there’s one thing that makes me genuinely angry, to the extent that I struggle to understand the world we live in, it’s that we still pump billions and billions of dollars into propping up the fossil fuel industry.

Fossil fuel subsidies can take many different forms but, put simply, they include any government action that artificially lowers the cost of fossil fuel energy production, raises the price received by energy producers or lowers the price paid by energy consumers.

There’s a lot of forms this can take – like tax breaks, giveaways, loans at favourable rates, price controls, purchase requirements and so on – and the UK government does them all.

Here are three reasons why you should be mad about this too:

1. Every nation in the world recognises the threat of climate change, but we continue fund the extraction and combustion of fossil fuels. That’s ludicrous. Recent research estimates that nearly $1 trillion annually goes into supporting the fossil fuel industry – and that’s not including other external impacts, like the cost of environmental damage or health implications that should be factored in to the cost of fossil fuels.

The worst part is that this is public money – your money! This is the taxes that we pay to our government. It’s time for governments to hear that we want a world with a future where people and nature thrive – not one that funds climate change and environmental damage.

2. Fossil fuel subsidies don’t help the world’s poorest. The International Energy Agency (IEA) has shown that only 8% of fossil fuel subsidies went to helping the world’s poorest people in 2010. It would take a mere 0.6% of fossil fuel export revenues to pull half of the population out of energy poverty in a country like Nigeria.

Removing fossil fuel subsidies would still need to be done carefully so it doesn’t adversely affect the world’s poorest populations. With proper protection – such as financial and technical assistance, a phased approach to ending subsidies, and building national programmes to redirect energy consumption – any negative impact can be avoided.

Phasing out production subsidies (i.e. the money that goes directly to fossil fuel companies like Shell and BP) won’t require technical or financial assistance – but political will, international coordination and intellectual coherence from our leaders.

3. Fossil fuel subsidies undermine the competitiveness of renewable fuels – like wave, wind, solar etc – which are essential to tackling climate change and ensuring energy access for all. The IEA report expresses alarm at the world’s “ongoing failure to realise the full potential of clean energy technology”. We totally agree. We need to see significant investment in all aspects of renewables, which only receive around $66 bn in subsidies annually – well under a tenth of what’s given to supprt fossil fuels.

The UK’s coalition government is giving out mixed messages. Nick Clegg, who’s leading the delegation to Rio+20, sees the dangers of “making a dash for growth” by exploiting precious natural resources, as it only makes us poorer in the end.

A bit different from George Osborne who, despite party promises to lead the “greenest government ever”, doesn’t seem to understand that short-term growth won’t result in long-term prosperity and wellbeing for us all, and is actively undermining the transition to renewables.

I hope Nick Clegg will hold true during the negotiations at Rio+20, to make sure we have a timeline for phasing out fossil fuel subsidies and full disclosure of the measures that support fossil fuels globally.

We need better corporate and government accountability and transparency across the board. The G20 has subsidy reform on the agenda too, and a strong mandate from David Cameron is essential for progress at Rio+20.

Rio+20 is about creating the future. But is it going to be the future we want, or the future Exxon Mobile wants?

What you can do right now:

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