World Should Eradicate Fossil Fuel
Nov 17, 2010 - Gerard Wynn - First
LONDON, Nov 9 (Reuters) - Abolishing fossil fuel
subsidies would boost the world's economy, environment
and energy security, the International Energy Agency
said on Tuesday, referring to a pledge made by G20
World leaders committed in Pittsburgh in 2009 to
phase out, over the medium-term, fossil fuel subsidies
which encouraged wasteful consumption. A G20 meeting
in Seoul this week may update progress on the goal.
"Eradicating subsidies to fossil fuels would
enhance energy security, reduce emissions of greenhouse
gases and air pollution, and bring economic benefits," said
the IEA, the energy watchdog to 28 industrialised
countries, in its annual set-piece World Energy Outlook.
The report estimated such subsidies at $312 billion
in 2009, mostly in developing countries, compared
with $57 billion in subsidies for renewable energy.
Fossil fuel subsidies were on course to reach $600
billion by 2015, and renewables subsidies more than
$100 billion, said Fatih Birol, IEA chief economist
and lead author of the report.
Eliminating fossil fuel consumption subsidies by
2020 would cut global energy demand by 5 percent,
compared with no action, and reduce carbon emissions
by nearly 6 percent by then, said the IEA report.
Economists say that governments should penalise
fossil fuels, to take account of the damage that
greenhouse gas emissions will cause the climate,
and blamed subsidies for encouraging waste and undermining
Achim Steiner, head of the U.N. Environment Programme,
said on Tuesday that a G20 push to phase out subsidies
for the fossil fuel industry would be a "good
start" to slow climate change.
Cash-strapped western countries are struggling to
raise cash for renewable energy, which is often more
expensive than conventional alternatives. The option
of eliminating fossil fuel subsidies may appear more
Renewable energy needed support, said the IEA, especially
given an expected, 10-year glut in gas which would
suppress power prices and make renewables even less
"The gas glut will be with us 10 more years," the
IEA's Birol told Reuters. "Cheaper gas prices
will put additional pressure on renewable energies
especially in the U.S. and Europe. If natural gas
is as plenty and cheap as we think, then life for
renewables will be even more difficult."
China would lead global uptake of all renewable
energy technologies, helping to "bring the cost
down compared to today by 20 percent between now
and 2035," Birol said.
If recently announced policies to curb carbon emissions
were enacted, under a "new policies scenario",
renewable energy would reach one third of global
power generation by 2035, catching up with coal,
compared with 19 percent now, requiring $5.7 trillion
of cumulative investment, the report found.
The use of biofuels would increase four-fold, meeting
8 percent of transport fuel up from 3 percent now.
Greenpeace said that the IEA was underestimating
the uptake of renewables.
The IEA said that pledges made by countries at last
year's Copenhagen summit to curb carbon emissions
would not meet the goal of limiting average global
warming to 2 degrees Celsius, and that the cost of
meeting that goal had risen by $1 trillion because
of the extra carbon-cutting effort which would be
needed after 2020.