Paris -- Phasing out fossil fuel subsidies could cut global greenhouse gas emissions by 10 percent and save governments money, the Organisation for Economic Co-Operation and Development (OECD) said 9 June.
Following the 2009 UN climate conference in Copenhagen, G20 leaders requested the OECD, International Energy Agency (IEA), OPEC, and the World Bank to prepare a joint report for the G20 Summit in Toronto this month.
According to the OECD analysis, based on data from the IEA, "Many governments are giving subsidies to fossil fuel production and consumption that encourage greenhouse gas emissions, at the same time as they are spending on projects to promote clean energy," said Angel Gurría, OECD secretary-general. "This is a wasteful use of scarce budget resources."
The IEA estimates that subsidies to fossil fuel consumption in developing countries amounted to around $557 000 million in 2008, although estimates in developed countries are harder to obtain as they are often transferred in indirect ways, the statement said.
According to the OECD, key elements in successful reform include: announcing subsidy phase-out plans early; phasing them in gradually; ensuring transparency and raised awareness by publicly circulating information on who pays and who benefits from reform; and accompanying reforms with measures to limit negative impacts on poorer households. (RD)"
