Global Investors Urge 2020 Phase-Out for G20 Fossil Fuel Subsidies
An international group of investors with US$2.8 trillion under management is urging the G20 to set a 2020 deadline to eliminate all fossil fuel subsidies, warning that they undermine implementation of the Paris Agreement.
“The current level of inefficient subsidies and lack of transparency are jeopardizing the global goal of meeting the Paris climate targets and of ensuring a secure, healthy, and reliable energy system,” warned Meryam Omi, head of sustainability and responsible investment strategy at Legal and General.
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“As investors, we are faced with a tremendous opportunity to finance the low-carbon transition and, as such, we look for the governments to set a clear timeline and a plan for phasing out fossil fuel subsidies to enable an orderly transition.”
“Global investors and insurers are sending a clear message to governments that burning public money through fossil fuel subsidies is not just bad for the planet, but bad economic policy too,” added Shelagh Whitley, climate and energy head at the Overseas Development Institute.
“G20 Ministers must heed investor voices, and ensure that the leaders of their countries commit to a firm deadline to end fossil fuel subsidies at the G20 Summit in Hamburg later this year.”
ClimateHome notes that the G20 countries have agreed to phase out “inefficient fossil fuel subsidies that encourage wasteful consumption” over the “medium term”. But “despite increasing pressure from civil society and some countries within the G20, the commitment has remained hazy.”
While G7 countries have promised to eliminate subsidies by 2025, “much of the world’s carbon emissions growth is coming from countries on the next rung of the economic ladder.”
Brigitte Knopf, secretary general of the Mercator Research Institute, said a 2020 target for the G20 would be “very ambitious”. However, “it is also very well possible for the G20 to come out with a two-step approach of different speeds, meaning that the industrialized countries agree to phase out earlier than the emerging economies.”