One of President Obama’s main climate policy thrusts was to persuade the world that since you often get what you pay for, the world should stop paying for more extreme climate disruption by subsidizing fossil fuels. Both the G7 and the G20 accepted Obama’s lead – at least nominally.
Some countries did something. Revealingly, both rich and poor countries which were helping energy consumers get cheaper fuel reformed. The United Arab Emirates has dismantled its subsidy regime for gasoline. Indonesia eliminated its gasoline subsidies and capped diesel supports. India has moved very aggressively, first eliminating diesel supports, and now phasing out even the subsidized kerosene intended to help the off-grid poor pay for lighting their homes. (Dealing with electricity subsidies has proven a heavier lift.)
But most richer countries, including the US and China, the nations who started the clamor to get prices right haven’t done so well. Their subsidies are mostly aimed at well-connected fossil fuel producers. Recent analysis shows that $60 billion a year is still flowing from 12 OECD members to oil, gas and coal producers, in a variety of forms, particularly export credits to encourage emerging markets to purchase oil, gas and coal technologies and equipment. This is four times as much subsidy as those same countries provide to clean energy.
So the world’s strongest economies are handing out more than $60 billion in public funds to the world’s biggest polluters, including some of the world’s richest companies, aiding and abetting Big Carbon’s effort to postpone the climate reckoning. At the same time they are pleading that their Treasuries are so depleted that they cannot keep their much less expensive long-standing promises to help finance the clean energy transition in developing countries.
Australia, for example, which was just chosen to lead the primary vehicle for climate aid, the Green Climate Fund, has provided $200 million for that agency. But…