Fossil fuels subsidies in the agenda of the G20
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- Kelley Terry
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From this document you will learn the answers to the following questions:
What was the main focus of the conference?
Which countries submitted strategies and timetables to rationalize and phase out inefficient fossil fuel subsidies?
What did the conference focus on?
Transcription
1 Fossil fuels subsidies in the agenda of the G20 María Victoria Lottici Researcher Centre for International Economy Argentine Ministry of Foreign Affairs and International Trade GSI-UNEP Conference - Increasing the Momentum of Fossil-Fuel Subsidy Reform: Developments and Opportunities Geneva, 14 October 2010 Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina
2 G20 Commitment to Rationalize and Phase Out Inefficient Fossil Fuel Subsidies Relevant passages of the Pittsburgh Leaders Statement (Sept 2009): Inefficient fossil fuel subsidies encourage wasteful consumption, distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change (paragraph 29). Rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption (paragraph 29). Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 1
3 G20 Commitment to Rationalize and Phase Out Inefficient Fossil Fuel Subsidies Relevant passages of the Pittsburgh Leaders Statement (Sept 2009): As we do that, we recognize the importance of providing those in need with essential energy services, including through the use of targeted cash transfers and other appropriate mechanisms (paragraph 29). This reform will not apply to our support for clean energy, renewables, and technologies that dramatically reduce greenhouse gas emissions (paragraph 29). Stimulate investment in clean energy, renewables, and energy efficiency and provide financial and technical support for such projects in developing countries (paragraph 31). Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 2
4 G20 ad hoc experts group on energy 1. Definitions of what constitutes an inefficient subsidy: a. a commonly agreed definition: a major challenge in the G20 context b. a country-owned process 2. Implementation strategies based on national circumstances 3. IEA, OPEC, OECD and World Bank joint report: a. scope of energy subsidies b. suggestions for the implementation of the G20 initiative Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 3
5 Toronto Summit Report to Leaders on the G20 Commitment to Rationalize and Phase Out Inefficient Fossil Fuel Subsidies (June 2010) 11 countries submitted strategies and timetables to rationalize and phase out inefficient fossil fuel subsidies: Argentina, Canada, Germany, India, Indonesia, Italy, Korea, Mexico, Russia, Turkey and the United States 8 countries reported no inefficient fossil fuel subsidies to reform in the context of G20 mandate: Australia, France, Japan, Saudi Arabia, South Africa and the UK Brazil and China to take actions on existing measures that affect fossil fuels consumption or production, although measures are not inefficient subsidies EU submission on energy taxation and state aid as a complement to submissions from individual EU countries Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 4
6 Next steps 1. G20 Sherpas (July 2010 meeting) asked energy experts group to: - continue to review progress towards the Pittsburgh commitment - undertake work with two additional energy-related agenda topics: energy price volatility and global marine environment protection (GMEP) 2. Proposal for a Second Joint Report on Fossil Fuel Subsidies from the International Organizations (IEA and World Bank) Case studies highlighting progress made and challenges faced To be provided to Leaders in Seoul next November Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 5
7 Comments regarding the G20 process from CEI perspective 1. G20 commitment could be assumed as greenhouse gas emission reduction commitments. It might be incompatible with the UNFCCC provisions: common but differentiated responsibilities and respective capabilities 2. The greatest impact on greenhouse gas emission reductions should be achieved by changing both explicit subsidies and measures e.g., financial transfers and tax deductions and implicit ones e.g., very low tax rates Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 6
8 Comments regarding the G20 process from CEI perspective 3. Excluding subsidies to renewable energy means disregarding a significant support given to biofuels and indirectly to fossil fuels 4. Definition of subsidy is no minor issue: it has consecuences on countries energy policies. Why not use WTO subsidy definition? Ministerio de Relaciones Exteriores, Comercio Internacional y Culto - Argentina 7
9 Thank you María Victoria Lottici Researcher Centre for International Economy Ministry of Foreign Affairs and International Trade Web Site:
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