Subsidy double game: Most fuel subsidies are being doled out in the rich West itself : Dinesh C. Sharma, News - India Today


Dinesh C.Sharma   |   Mail Today  |   New Delhi, December 5, 2012 | UPDATED 09:05 IST
When it comes to subsidies on fossil fuels, rich countries of the world are playing a double game.

On one hand, the demand to include measures aimed at cutting subsidies on fossil fuels in any future treaty on climate change is growing. On the other hand, it appears that most such subsidies are being doled out in the rich West itself and are benefiting only the undeserved.

New data released in Doha by US-based group Oil Change International shows that industrialised countries are doling out subsidies worth billions of dollars a year, with the US leading the chart at $13 billion (Rs 71,188 crore) in fossil fuel subsidies a year.

Australia with $8.3 billion and the UK and Germany with $6.6 billion each are among countries that subsidise fossil fuels.

Christiana Figueres, the head of the U.N.Christiana Figueres, the head of the U.N.'s Climate Change SecretariatBut when it comes to helping developing countries financially in addressing challenges of climate change , rich countries have a different yardstick. Fuel subsidies of the rich countries are, on an average, five times greater than the same countries' pledges towards climate finance, the group said.

Data from other sources supports this analysis on fuel subsidy. Laura Cozzi of International Energy Agency (IEA) said fossil fuel subsidies are growing at a massive rate and amounted to $523 billion globally in 2011. Yet 1.3 billion people in the world have no access to electricity.

Subsidies mostly denote inefficient use of fuels and imply that the world is subsidising carbon emissions.

Top climate diplomats of both the US and European Union have spoken against fossil fuel subsidies, but they too feel that removing subsidies may be a political hot potato.

"It is an important issue which was flagged off in the G-20 meet by the US. It makes tremendous amount of sense because $400 to $700 billion a year is spent on fossil fuel subsidies and IEA data shows that only around 20 per cent goes to the poor people", agreed Todd Stern, US special envoy for climate change.

However, Stern said: "It is going to be very difficult (to cut subsidies) at home and in other countries because of entrenched interests". At the same time, there are ways other than subsidies to take care of the poor. For instance, the same amount of money can be provided directly to the poor instead of running it through global economy, he added.

Asked if fossil fuel subsidy reduction should be part of climate change treaty, Connie Hedegaard, EU commissioner for climate change, said the issue needs to be addressed in whichever way possible.

"Fuel subsidies such as kerosene are for the poor and now they are going to be targeted for better delivery. But in rich countries, fossil fuel industry is subsidised in different ways. It is going to be difficult to bring such diverse cases on a single platform," commented Sunita Narain, head of the Centre for Science and Environment.
