Oil Change International

Exposing the true costs of fossil fuels

Actions to take on fossil fuel subsidies within the UNFCCC

Read an overview briefing on Fossil Fuel Subsidies, Climate and the UNFCCC published by the Heinrich Boell Foundation.

The United Nations Framework Convention on Climate Change (UNFCCC) presents a number of opportunities for Parties to take further steps in identifying and removing harmful fossil fuel subsidies by 2015.

Mitigation Ambition

Over 110 countries were represented by submissions that included phasing out fossil fuel subsidies in the recent call for input on increasing mitigation ambition.  These countries include: Denmark on behalf of the European Union; Gambia on behalf of the Least Developed Countries (LDCs); the Republic of Nauru on behalf of the Alliance of Small Island States; New Zealand; Norway; Switzerland; and the United States of America.

Analysis by the International Energy Agency (IEA) shows that phasing out subsidies to fossil-fuel consumption in the 37 largest developing countries could reduce energy related carbon dioxide emissions by 6.9% in 2020 compared to business as usual, or 2.4 gigatonnes.  These reductions alone would be roughly 40% of the reductions needed between now and 2020 to put the world on the path to 2 degrees by 2050.  It is important to note that this estimate does not include subsidy removal in Annex 1 at all. Regardless of the full estimate, it is clear that the reduction potential is significant and should be pursued.

Eliminating fossil fuel subsidies should be included in considerations on how to increase ambition in developed countries, as well as possible nationally appropriate mitigation actions (NAMAs) for developing countries.

Climate Finance

In developed countries, fossil fuel subsidies represent billions of US dollars in wasteful spending. The OECD has estimated that USD 45 to 75 billion a year has been spent on fossil fuel subsidies in its member countries in recent years, while other estimates suggest developed countries as a whole spend US$100 billion annually on subsidies for fossil fuels.

The liberation of finances resulting from elimination of fossil fuel subsidies represent a significant potential source of climate finance, and should be included as such in discussions of sources.

Reporting

The status of fossil fuel subsidies should be reported as part of a country’s national communication, the purpose of which should be to simply increase transparency. Parties still need to agree to revise national communications guidelines for both developed and developing countries, respectively.

In this context, Parties should recognize the need to enhance fossil fuel subsidy reporting as part of those revisions.