New Delhi: Last year, G20 countries supported fossil fuels in a big way. In 2022, they spent a record US $ 1.4 trillion – more than double the pre-COVID and pre-energy crisis levels of 2019 – on fossil fuels, per a report released on August 23 by the International Institute for Sustainable Development, an international think tank. This came mostly in the form of subsidies (around US $ 1 trillion), and investments by state-owned enterprises and lending from public financial institutions. The support for fossil fuels is in contradiction with pledges that countries have made to phase down fossil fuels as per some international climate commitments, including a commitment by the G20 in 2009. The report also gave several recommendations to the G20, including the benefits of levying a carbon tax to incentivize consumers and investors to shift away from using and funding fossil fuels. Per their estimate, such a tax can bring in around US $ 1 trillion every year and help finance social welfare schemes and just transitions.The report comes ahead of the 18th G20 Leaders’ Summit that will be held in September in New Delhi, where topics including climate change and energy will be discussed; all eyes are now on these talks. However, related ministerial and working group meetings that have concluded as part of the G20 summit in India have been marked by a lack of consensus on issues including those pertaining to energy transitions.Record spending on fossil fuels in 2022As per a report released August 23 by the International Institute for Sustainable Development (IISD), G20 countries spent a record US $ 1.4 trillion – more than double the pre-COVID and pre-energy crisis levels of 2019 – on fossil fuels. This came mostly in the form of subsidies which amounted to at least US $ 1 trillion. Per the report, this was more than four times the annual average in the previous decade, and due to the high consumption subsidies that countries offered in response to the energy crisis fuelled by the ongoing Russia-Ukraine war. It is crucial that G20 countries agree to a deadline to eliminate fossil fuel subsidies (such as the G7 committing to doing this by 2025). Removing subsidies could also save thousands of lives by reducing fossil fuel-related air pollution, which is responsible for over 5 million deaths per year in G20 countries and one in five deaths globally, per the report. G20 posters are often seen in Delhi as the city is set to host the summit in September this year. Photo: Twitter/@sidhant. February 28, 2023.Investments in fossil fuel infrastructure by state-owned enterprises (SOEs) in G20 countries was also above pre-pandemic and pre-energy crisis levels, at US $ 322 billion in 2022, per the report. Such investments, “a massive down payment on new fossil production, GHG emissions, and pollution”, are also increasing, and this is “starkly at odds” with the latest climate science that suggests that countries should not invest in setting up new fossil fuel supply projects, it said. Citing the example of India’s NTPC (formerly the National Thermal Power Corporation), the report recommended that SOEs “develop and implement evidence-based diversification strategies that identify new clean energy business opportunities”.While international public financing for fossil fuels has been decreasing, and is still at an average of US $ 50 billion per year (from 2019 to 2021), it’s still not enough. It is still nearly four times greater than support for clean energy, the report noted.Renewable energy and a carbon taxGlobal investment in renewable energy reached a record high of US $ 500 billion in 2022 but was still only around half of the investment in fossil fuels (US $ 950 billion), the report found. While G20 countries announced US $ 265 billion in subsidies for renewable power generation between 2020 and June 2023, subsidies for fossil fuels were far higher, amounting to over US $ 1.4 trillion from 2020 to 2022.The report recommends that the G20 countries act on climate commitments by eliminating all public financial flows to fossil fuels other than those necessary to provide energy access to the poorest. “The boldest, fastest action should be from the G20’s highest per-capita income members, given their historical responsibility for emissions and higher emissions per unit of GDP,” the report said.The IISD report also recommends that the G20 incentivise consumers and investors to shift away from fossil fuels by setting minimum carbon taxation levels of between US $ 25 and US $ 75 per tonne of carbon dioxide equivalent (tCO2e), depending on country income. This, they say, will bring in at least US $ 1 trillion every year, and can be used to fund important social welfare schemes and just transition in these countries.The report provides “impactful numbers” and tells a “very alarming story”, commented Diala Hawila, programme officer, International Renewable Energy Agency. It shows how dwarfed renewable energy investments are when compared to fossil fuels, especially when we look at public investments, she said.The IISD report also recommends that the G20 incentivise consumers and investors to shift away from fossil fuels by setting minimum carbon taxation levels. Photo: ThinkstockThe findings of the report suggest that the support for fossil fuels by the G20 in 2022 is in contradiction to the pledges of phasing down fossil fuels that countries have made as per some international climate commitments, including a commitment by the G20 in 2009. The report recommended that G20 members set a clear deadline – 2025 for developed countries and 2030 for emerging economies – to eliminate fossil fuel subsidies and deliver on their 2009 commitment to reform subsidies.“We would like the G20 to show some leadership here and push the level of ambition,” said Tara Laan, senior associate, IISD, and the lead author of the report. This is particularly important because the Conference of Parties is coming up and the G20 cannot be seen in isolation of that, she added. “This COP is controversial and we’re concerned that the level of ambition will not be high given where it is being hosted…there are strong fossil fuel interests there.”Also read: Lack of Unanimity on Climate Targets Among G20 Delegates Worries COP OrganisersThe United Arab Emirates will host the 28th Conference of Parties (COP28) at Dubai later this year. The COP’s President-Designate, Sultan Ahmed Al Jaber, is the UAE’s Minister of Industry and Advanced Technology and the serving CEO of the United Arab Emirates-owned Abu Dhabi National Oil Company. The company was able to read emails to and from the CoP28 climate summit office and was consulted on how to respond to a media inquiry, The Guardian reported in June. India, fossil fuels and the G20 summit“As G20 chair, India can confidently demonstrate global leadership in this area, having reduced its fossil fuel subsidies by 76% from 2014 to 2022 while significantly increasing support for clean energy,” the report said.Prime Minister Modi at an earlier session of the G20 Summit in Rome on climate change. Photo: PTI/FileHowever, the meetings that have concluded do not offer much hope. The G20 Environment and Climate Ministers’ Meeting that concluded on July 28 in Chennai, for instance, was marked by a lack of consensus on emissions, and other crucial issues. Per the outcome document, despite discussions on the importance of clean energy transitions, including accelerating the scaling up of renewable energy, tripling renewable capacity, and phasing down fossil fuels, there existed “divergent views” among members to discuss energy issues in light of the existence of a separate Energy Transition Working Group.We expect to see the G20 show leadership in urgently implementing a shift in public financial flows away from fossil fuels, said Shruti Sharma, senior policy advisor, IISD, in reply to questions at the online launch of the report on August 23. “We ‘recommend’ G20 members to improve transparency “commit to annually report on all support for fossil fuels under indicator SDG 12.c.1, in a comprehensive manner and on an annual basis””, she wrote. “We also recommend and expect G20 members to adopt a specific timeline for fossil-fuel subsidy reform, bearing in mind the G7 goal to phase out fossil fuel subsidies by 2025, and the need to show leadership by fully implementing reforms before 2030.”India, she said, has a strong track record on reform implementation because it reduced the value of fossil fuel subsidies by 76% between 2014 and 2022. “So there’s a real opportunity for the Presidency to bring it up in this year’s agenda,” Sharma said.All eyes are now on the G20 World Leaders’ Summit that will take place in New Delhi on September 9 and 10.