Oil Change International

Exposing the true costs of fossil fuels

International Fossil Fuel Subsidies

NEW Analysis of Fossil Fuel Subsidies vs. Climate Finance – December 2012 (pdf)

In 2009, G20 leaders pledged to phase out fossil fuel subsidies.  While this was an historic commitment, very little concrete action has followed.  Part of the reason for this failure is that there is not clarity on how much of our money governments provide in fossil fuel subsidies.  As shown below, the total, global amount of fossil fuel subsidies provided in 2012 is likely to be at least ¾ of a trillion dollars annually – $775 Billion.

To help ensure we can reduce or eliminate these subsidies successfully,  we have to know how many of them there are.  Governments need to stop hiding their handouts to oil, gas and coal and come clean.

The figures below provide estimates of various groupings of subsidies, showing a range of existing subsidies from at least $775 billion to perhaps $1 trillion or more in 2012.  Greater transparency would allow for more precise figures.

No matter how conservatively the numbers are calculated, eliminating global fossil fuel subsidies represent a tremendous opportunity for increased efficiencies in spending, reductions in global reliance on fossil fuels and greenhouse gas emissions, and sources of finance for climate-related activities and other efforts.  Some countries may choose to retain some fossil fuel subsidies that they deem “efficient”.  But regardless, both the subsidy and any rationale for not removing it should still be revealed.

Amount (in USD annually) What type/from where? Explanation and sources
$630 Billion Consumption Subsidies in Developing Countries The most widely cited figure for fossil fuel subsidies, although it only covers consumption subsidies for developing countries.  The International Energy Agency expects this figure to reach $630 Billion in 2012.  This number fluctuates widely with the price of oil – it was $409 billion in 2010 and $557 billion in 2008.
+ $45 billion Consumption Subsidies in Developed Countries Conservative accounting of fossil fuel subsidies compiled by the OECD and broken out here. $45 billion is the 2008-2010 average of annual consumption subsidies.
+ $100 Billion Producer Subsidies Globally This figure was cited in the June 2010 Report for G-20 leaders from OECD, IEA, World Bank and OPEC (Page 4), among other places. Greater transparency is certainly needed here to further refine this figure.
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$775 BILLION in fossil fuel subsidies — This year, there will be $775 Billion worth of global fossil fuel subsidies that can be reliably estimated from the current available data.

Our most recent compilation of estimates indicates that global fossil fuel subsidies are at least $775 billion annually, and quite possibly much higher. Download our fact sheet that breaks this down and calls for increased transparency here.

There are a number of international forums where action on fossil fuel subsidies is necessary:

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