UK only G7 nation to increase fossil fuel subsidies
G20 countries as a whole are providing $452bn (£297.5bn) in support for fossil fuels, almost four times the $121bn given to renewable energy in subsidies globally, according to the study from UK based think-tank the Overseas Development Institute (ODI).
The UK government’s provision of tax breaks for oil reserves in the North Sea, worth £1.7bn over the next five years, are singled out by the study, along with the £3.7bn given by the country to subsidise fossil fuel production overseas and its scaling back of investment into renewables.
The report, which focuses on three areas of funding including national subsidies, delivered through direct spending and tax breaks; public finance, from majority government-owned banks and financial institutions; and investments by majority state-owned enterprises (SOEs); accounting for $78bn (£51bn), $88bn (£58bn) and $286bn (£188bn) respectively.
The study, entitled ‘Empty promises: G20 subsidies to oil, gas and coal production’, shows that Russia provided $23bn (£15bn) in fossil fuel subsidies on average over 2013/14, with the US giving $20bn (£13bn), whilst Japan handed out the largest annual public financing for fossil fuels, at an average of $19bn (£12.5bn).
Shelagh Whitley, author of the report, emphasises how the UK stands out as a member of the G20 that has increased subsidies for fossil fuels despite promising to phase them out.
“The UK has been cutting back support for solar power and energy efficiency, arguing that the burden was too high. Our figures reveal that in spite of supposed budget constraints the government is giving ever increasing handouts to oil and gas majors,” she said.
The report comes just over two weeks before the UN’s Climate Change Conference in Paris and also follows Energy Secretary Amber Rudd’s admission that the UK is set to miss its renewable energy target after a letter she sent to cabinet colleagues was leaked to The Ecologist.
Chancellor George Osborne triggered the biggest investment in UK fossil fuels since the 1970s in December last year. The country has recently lost its AAA energy rating, while the US and China have agreed to set a deadline for the phasing out of fossil fuel subsidies in 2016.
