OECD: Fuel subsidies outstrip cash needed to fight climate change

2015-09-21 22:10
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Paris - Considerably more government money has been invested worldwide in subsidies for fossil fuels than would be needed to fight climate change, according to a study released on Monday by the Organisation for Economic Co-operation and Development (OECD).

The report said that in addition to distorting the market for energy, subsidies consume funds that could be used for education and infrastructure projects and they undermine climate change policies.

"If we stop the subsidies, we will have the resources that we need," OECD Secretary General Jose Angel Gurria said, referring to $100bn sought annually to help developing countries protect themselves against climate change.

Calling the subsidy of fossil fuels an "obsolete policy", Gurria called for a "change in course".

According to the OECD, coal, natural gas and petroleum received annual subsidies of $160bn to $200bn from 2010 to 2014 in the 34 OECD countries and six emerging economies.

The organisation, however, said subsidies were being reduced gradually overall. The reasons for the reductions included falling oil prices and efforts by many states to move towards an environmentally and economically more sustainable energy policy.

The report said most of the reductions took place in Mexico, where subsidies went from €18.5bn in 2012 to €2.5bn in 2014.

Read more on:    oecd  |  climate change

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