Oil Change International

Exposing the true costs of fossil fuels

World Leaders, Ministers and experts all agree on phasing out fossil fuel subsidies

Numerous heads of state, ministers, and other prominent figures have spoke out on the need to phase out fossil fuel subsidies. A small sampling is found below…

Ban Ki Moon, UN Secretary General

  •  “Science and economics tell us we need to make the transition to clean energy as quickly as possible.  Phasing out inefficient fossil fuel subsidies is an important part of that equation, and was endorsed by the G-20 Summit meeting.  But we must do so in a careful, gradual manner.  We cannot build a sustainable, green economy on the backs of the poorest and most vulnerable people.” Statement to Davos Energy Forum on January 27, 2012.

Barack Obama, President of the United States

  • “We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs.” State of the Union Address, January 2012.
  •  “What’s more, at a time when big oil companies are making more money than ever before, we’re still giving them $4 billion of your tax dollars in subsidies every year.  Your member of Congress should be fighting for you.  Not for big financial firms.  Not for big oil companies.” Weekly Address, March 17, 2012.

Martin Lidegaard, Danish Minister for Climate, Energy and Buildings

  •  ”It’s obvious to all of us that there is a mitigation ambition gap, both towards 2020 and after 2020.  We can only address that by looking both at pledges to be increased and to get more countries on board, but also to look at complementary issues like phasing out fossil fuel subsidies…It’s not either or; it’s both.”  Informal Ministerial Roundtable for Ambitious Follow-up to Durban – Accelerated Climate Actions press conference.

Jairam Ramesh, Minister of Rural Development, India

  • “All fuel subsidies are perverse…So, from every aspect, it is beneficial to rationalise subsidies to improve usage.” … ”Of the three Fs – food, fuel and fertilizer – the subsidy for fuel is the most perverse….if we have to start attacking subsidies, then fuel is a good place to begin. It has been postponed for too long.” … “The time for pussyfooting is over. We still have two years left and it is time to take the bull by its horns. Whatever the reaction, we will face it. We have to. Leadership is about taking people on a trajectory where they were not going or didn’t want to go. It is not about going where you were already going.”  Interview with The Economic Times, India, 29 May 2012.

Trevor Manuel, Head of the National Planning Commission, South Africa

  • “[P]olicies, such as redirecting subsidies that are currently paid by the rich countries to the fossil fuel industries, … could provide a further US$10 bn each year.” —  Statement with Lord Nicholas Stern on November 8, 2010.

David Macdonald, Chair of Canada’s House of Commons Environment Committee

  • “We’re far too dependent on fossil fuels, and the longer we let that go on and subsidize it, the more we’re just making it so much tougher for future generations. So I think this is a no-brainer. Fossil fuels (subsidies) are a drag. They enforce consumption, they are unbalancing our energy future, and we should get rid of them.” Statement, March 17, 2012.

European Union Climate Commissioner Connie Hedegaard

  • “We must internationally get the pricing right. The way we measure GDP today… we must take care that there is a price attached to harming the common environment.  One place to start would be to phase out fossil fuel subsidies.”  StatementMarch 1, 2012.
  • “We said we should phase out fossil fuel subsidies, then we should take into consideration that we should phase out first the most harmful, and in the way you phase out, take care of the poorest people’s interests. We’re just stating as a fact from the International Energy Agency that in 2010 … the world subsidised fossils for more than $400 billion whereas it was only subsidising renewables for between $60-and-$70 billion, meaning that was six to seven times as much subsidising of fossils fuels that we want less of instead of renewables that we agree we want more of.” Comments on the on United Nations Global Sustainability Report (GSP) recommendation 27 f to “Phase out fossil fuel subsidies and reduce other perverse or trade-distorting subsidies by 2020” on February 2, 2012.
  • “We have to steer away from fossil fuel growth.” Statement at the 12th Delhi Sustainable Development Summit in New Delhi, February 2, 2012.

Maria van der Hoeven Executive Director of the International Energy Agency (IEA)

  • “Governments also need to think carefully about price subsidies and taxes. End-user subsidies, while carrying noble social objectives, are often economically inefficient and distort price signals to consumers. The public will not respond to triple digit international prices if it is paying only a fraction of that at the pump.”  Statement, March 14, 2012.

Fatih Birol Chief Economist of the International Energy Agency (IEA)

  •  “Today, the most important roadblock for renewable energy implementation is the world’s fossil fuel subsidies. You say you want to have a higher share of renewables then you protect and foster fossil fuels by giving substantial subsidies – it doesn’t work.” Statement in United Arab Emirates, January 18, 2012.
  • The problem of oil addiction was compounded by distorting subsidies for fossil fuels, common in many developing countries. These subsidies will reach a record $630bn this year, according to the IEA’s latest data. Meanwhile, developed countries are far from immune to the problems of oil dependence. Birol noted that last year’s bill to the EU for oil imports topped $500bn for the first time. “That is the equivalent of a Greek crisis – every year.” Press report, April 2, 2012.
  • “Fossil fuel subsidies are a hand brake as we drive along the road to a sustainable energy future. Removing them would take us half way to a trajectory that would hold us to 2C.” Report in Forbes, January 29, 2012
  • “Subsidies provided for fossil fuel in 2010 are around $409 billion. Only 8 percent of this has gone to the poor. Supporting fossil fuels on one hand and trying to increase the share of renewable energy on the other hand is not a wise approach.” Hürriyet Daily News, Turkey, January 18, 2012.

Lord Nicholas Stern, former World Bank chief economist, author of Stern Review on the economics of climate change

  • “Rich economies waste money and disadvantage renewable energy by giving away tax breaks, loans and other subsidies to the fossil fuel industry. If governments were to cut these out, and dedicate the savings to helping poor countries, that could raise about $10bn a year towards helping the poor on climate change.” Statement during the UNFCCC climate talks in Durban, South Africa, December 8, 2011.
  • “When applied to fossil fuels, subsidies discourage the development of and investment in low carbon alternatives…” The Stern Review, by Economist Lord Nicholas Stern, on October 30 2006, Page 278, Section 12.5: The role of pricing and regulatory reforms in the energy markets.
Angel Gurria, Secretary-general of the Organization of Economist Cooperation and Development (OECD)
  • “Both developing and developed countries need to phase out inefficient fossil fuel subsidies. As they look for policy responses to the worst economic crisis of our lifetimes, phasing out subsidies is an obvious way to help governments meet their economic, environmental and social goals. For this to succeed, we need well-targeted, transparent and time-bound programmes to assist poor households and energy workers who might be adversely affected in the short-term. OECD and IEA data and analysis can help guide the process.” Statement, October 4, 2011.
  • “As they (nations) look for policy responses to the worst economic crisis of our lifetimes, phasing out subsidies is an obvious way to help governments meet their economic, environmental and social goals.” Statement to Reuters, October 4, 2011.

Tim Groser, New Zealand Minister Responsible for International Climate Change Negotiations

  • “It is completely incoherent for the world to be tentatively coordinating actions to put a price on carbon, while simultaneously massively subsidizing consumption of carbon.” Statement at Cancun climate negotiations, December 2010
  • “Reform of huge subsidies for fossil fuels deserves to be far higher up both the climate change and general economic reform agendas.” Press release, December 2010.
  • “Likewise, the reform of inefficient subsidies for fossil fuels has moved into the international limelight because of its considerable climate change mitigation potential, as well as benefits for trade, economic growth, and energy security. As we grapple internationally and within our own economies with how to put a price on carbon, it is incoherent to think that globally we are at the same time subsidising the consumption and production of fossil fuels to the tune of at least $400 billion a year.” Statement, September 23, 2011.

Achim Steiner, Director General of the UN Environment Programme (UNEP)

  •  “Fossil fuel subsidies amount to a huge inducement to prefer carbon-based fuels over the alternatives and seriously tilt the playing field away from renewables.”  Statement, November 14,  2011.
  • “Taking an average figure of half a trillon dollars per year, we are subsidizing fossil fuels at a rate of eight times what it would cost annually to fully implement the Millennium Development Goals…just eliminating fossil fuel subsidies, according to the International Energy Agency, would provide 40 percent of the carbon reduction needed to hold global warming to the 2 degree ceiling.” Statement in Berlin, November 2011

Jose Maria Figueres, former President of Costa Rica

Others

  • “The removal of subsidies to fossil fuels, reinforced by new trade rules, could be an enormous help.” Report by Gary Clyde Hufbauer (Reginald Jones Senior Fellow at the Peterson Institute for International Economics, Washington, DC) and Jisun Kim (visiting researcher at POSCO Research Institute, Korea), on June 17, 2010.
  • “The case for oil subsidies is laughably thin. Proponents argue that the more you subsidize oil production, the more oil you’ll get, and that, after all, is a good thing for consumers when gasoline prices are around $2.25 a gallon. Unfortunately, there’s simply not enough unexploited oil in the United States that might be exploited as a consequence of those subsidies to greatly affect world crude oil prices.” Jerry Taylor and Peter Van Doren (Cato Institute), National Review (Online), on January 17, 2007.