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The G20 poured $1trn into fossil fuel subsidies last year

After failing to reach a consensus on phasing down fossil fuels last month, it has since been revealed that the G20 poured $1trn into fossil fuel subsidies in 2022.

It’s all starting to make sense.

Last month, a crunch G20 meeting took place in India in which the world’s wealthiest nations were expected to thrash out decarbonisation plans for the foreseeable future.

In reality, four days were spent deliberating semantics and no consensus was reached on phasing down fossil fuels at all. Other sticking points with no resolution included tripling renewables, and the mobilisation of regular funding to developing countries.

The reason for this impasse has now been made clear mere weeks later. The latest reports from the International Institute for Sustainable Development suggest the G20 poured record levels of public funding into fossil fuel projects last year.

A cool $1.4trn can be broken down into $1trn in subsidies, $322bn in investments by state-owned enterprises, and $50bn in loans from public finance institutions. The total amount is more than double the sum provided in 2019 and arrives 14 years after the G20’s initial promise to phase out inefficient fuel subsidies in 2009.


It’s one thing to have fossil fuel proprietors boasting record profits as we approach the vital tipping point of 1.5C warming, but to know the world’s most powerful governments are not only complicit, but are literally heaping fuel on the fire is seriously alarming.

‘There is little incentive for them [fossil fuel companies] to change their business models in line with what’s needed to limit global warming, but governments have the power to push them in the right direction,’ asserts Tara Laan, a senior associate of the IISD.

Fossil fuel subsidies have increased by 475% since 2010, largely propelled by social and political necessity. It’s understandable that both the pandemic and the invasion of Ukraine prompted governments to intervene in the costs of fuel and capping energy bills, but there has to be an end in sight.

The IISD has called – no doubt on deaf ears – for G20 leaders to end fossil fuel subsidies in rich countries by 2025 and in the rest by 2030.


In the meantime, it states that energy subsidies should be used to protect the nations most vulnerable to the impacts of climate change. This is a far cry from the current reality, in which three-quarters inexplicably go to fossil fuels.

‘By re-purposing wasteful subsidies, we can free up significant sums that could instead be used to address some of the planet’s most pressing challenges,’ says Richard Damania, chief economist of sustainability at the World Bank.

As first order of business for the G20 moving forward, he IISD recommends that a higher carbon tax of between $25-75 per ton of greenhouse gas emissions be introduced to raise an extra $1trn a year.

We’re not holding our breaths, in the metaphorical sense anyway.