Turin, Italy: Speech by Gilberto Pichetto Fratin, Italian Minister of Environment and Energy Security … [+]
How many times can you vow to do something before you actually feel obligated to fulfill your promise? On fossil fuel subsidies, we can hope that at a conference in Italy this week, the finance ministers of the world's richest countries will decide it's time for action, not just promises.
In 2009, the G20, which includes all the world's major economies, called for all countries to phase out inefficient fossil fuel subsidies, a pledge that was reaffirmed in 2012. At COP26, COP27 and COP28, countries agreed to accelerate efforts to phase out inefficient fossil fuel subsidies.
But globally, direct fossil fuel subsidies are set to hit a staggering $1.5 trillion in 2022, according to the OECD and IEA – almost double from the previous year, despite all the promises as governments struggle with rising energy costs.
The International Monetary Fund predicts that these subsidies will decline in the short term “as energy price support policies ease and international prices decline.” However, we predict that fossil fuel subsidies will increase further by 2030 as fuel consumption in emerging markets continues to rise.
At the same time, to limit global temperature rise to 1.5 degrees Celsius and avoid the worst impacts of climate change, as called for in the Paris Agreement, emissions must be halved by 2030 and in real terms by 2050. need to reach zero.
Increased subsidies for fossil fuels are incompatible with the vital work of reducing the world's dependence on coal, oil and gas, reducing emissions, and shifting financial flows away from fossil fuels and toward clean technologies. This is common sense.
The G7 has previously expressed leadership here, with G7 energy and climate ministers in April this year pledging to phase out inefficient fossil fuel subsidies by 2025, or sooner. I reaffirmed that promise.. As we reach the middle of 2024, it is clear that there is no more time to waste. G7 finance ministers meeting on the shores of Lake Maggiore in Italy this week need to step up and take the necessary urgent action. And this can be done in a way that does not disproportionately impact the poorest members of society.
Finance ministers can move the world further by ensuring that fiscal commitments, including public investment and subsidies, are fully aligned with the goal of transitioning away from fossil fuels, as agreed at COP28. .
Governments around the world, led by the G7 countries historically most responsible for greenhouse gas emissions, have set targets and schedules for the unabated phase-out of fossil fuels along a 1.5°C trajectory There is a need to.
The G7 climate and energy ministers' meeting in April took a step in the right direction in this regard, agreeing to phase out the use of coal power in the energy system “in the early 2030s”. Most countries have already signed such pledges, but the agreement signaled a significant shift in direction for Japan, which continues to generate more than a quarter of its energy from coal. But this alone is not enough.
Ministers pledged to achieve 100% decarbonization of electricity systems by 2035 in developed countries and no later than 2040 in other countries, and to support economic diversification and net-zero development globally. – It is necessary to agree on assistance to the South countries. aisle. This support should include funding and capacity building for just transition planning to ensure that no one is excluded in the transition to a clean technology economy and that the transition is as fair as possible. .
Redirecting public and private financial flows away from fossil fuels, including putting a meaningful price on carbon and reforming and recycling fossil fuel subsidies, must be central to this change. It doesn't have to be. Without a conscious and controlled redirection of financial flows, high promises to phase out fossil fuels and subsidies will not be achieved.
As Christine Shearer, project manager at the nonprofit Global Energy Monitor, wrote in a recent letter to the Financial Times, the G7 deadline for the wealthiest countries to remove coal from their energy systems is a “promising development,” but it's not a given.
“About 60% of the G7's operating coal-fired power plants, or 230 units, still have no concrete plans to retire in line with the 2035 target,” she wrote. “The biggest challenge will be in the US, which has over 200 coal-fired power plants, almost half of the G7 coal-fired power plants. Of these, 120 will be phased out at the plant level in 2035 No scheduled retirement date has been determined at this time.
The closure of these factories will lead to major changes in the employment situation. It is essential that governments and businesses invest in upskilling and reskilling to guide people through the transition to clean energy in a way that is fair and effective for affected communities.
Ambitious plans require proper planning and financing. This month's meeting of G7 finance ministers could help put the world on a path that better aligns ambition with reality.
