UK Lags Behind on Fossil Fuel Subsidy Reform as Developing Countries Take the Lead

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Countries must aim to phase out fossil fuel subsidies by 2020 — five years earlier than promised — the International Institute for Sustainable Development (IISD) has told the international climate talks in Marrakech.

A new report shows just how far the UK is from achieving that goal, however.

At a UN climate summit in 2014, former prime minister David Cameron pledged to “invest in low carbon and fight against environmentally perverse fossil fuel subsidies.”

A recent report by thinktank InfluenceMap shows the UK continues to provide the industry with support worth £5.3 billion.

The report highlights the disconnect between the UK’s climate policy rhetoric and the way the government supports the country’s energy system.

The government aims to extract three to four billion barrels of oil and gas in the next 20 years, InfluenceMap says. The analysis shows how the UK has introduced big tax breaks for the oil and fracking industries while slashing support for renewable energy and lobbying the EU to prevent a ban on state-aid to fossil fuels in recent years. 

In this year’s budget, the tax rate on revenues from petrol was axed from 35% to zero. The then chancellor, George Osbourne, admitted that made the UK one of the most generous tax regimes for oil and gas in the world.

InfluenceMap’s Research director, Thomas O’Neill, tells DeSmog UK: “The UK‘s claim of leadership on reducing fossil fuel subsidies is somewhat incongruous. It has failed to incentivise new low-carbon electricity production whilst enabling a shady and highly polluting industry in diesel generation.”

The UK’s failure to implement subsidy reform contrasts with other countries’ efforts, presented at the international climate negotiations in Marrakech this week.

The IEA’s new World Energy Outlook report, released today, shows the value of global fossil fuel subsidies dropped to $325 billion in 2015, from almost $500 billion the previous year. It partially attributes this to the subsidy reform agenda “gathering momentum” across the world.

At a side event at the Marrakech negotiations, a panel of experts and ministers praised the the US and China for making coordinated efforts to begin to phase out fossil fuel subsidies.

But the real leaders seem to be developing countries, which recognise the benefits of subsidy reform that go beyond reducing their countries’ emissions.

Ethiopian minister for environment and climate change, Kare Chawicha Debessa, said, “What we have cut from fossil fuel subsidies we have invested in social and health services, education and infrastructure for renewable energy generation to reduce poverty”.

Scott Vaughan, President of the IISD, said: “If Ethiopia can do it, than everyone can do it.”

If the government is serious about addressing climate change, that must soon include the UK.

Chloe Farand is a freelance reporter and is attending COP22 as part of the UK Youth Climate Coalition delegation.

Main image: Breado 62 via Flickr, CC BY SA

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