Stories from G20 Countries: Shifting public money out of fossil fuels
This analysis has brought together examples illustrating how G20 countries can learn from each other and align the flows of public money with climate targets and the Sustainable Development Goals.
Energy subsidies and tax revenues, investments by state-owned enterprises (SOEs) as well as credit support through state-owned banks and international finance institutions represent flows of public money that can either undermine or encourage sustainable development and decarbonization.
Some G20 governments have made progress in shifting at least some support away from fossil fuels and increasing their taxation. This working paper has brought together examples illustrating how reforms can be enabled and implemented to align the flows of public money with the Paris Agreement and SDGs:
- Story 1 provides the example of Indonesia as a country that saved USD 15.6 billion by reforming untargeted subsidies for gasoline and diesel in 2015.
- Stories 2 and 3 highlight recent reforms removing subsidies for fossil fuel exploration, development and production in Canada and Argentina (Spanish version).
- Story 4 features reforms in the European Union, including progress in its accountability on fossil fuel subsidies and the phase-out of subsidies for hard coal mining by the end of 2018.
- Story 5 unpacks the progress on shifting credit support from public financial institutions, including multilateral development banks, away from fossil fuels.
- Story 6 deals with the examples of SOEs in coal mining and fossil fuel power diversification in clean energy in China, India and Sweden.
- Stories 7 and 8 discuss a related issue of not just removing government support from fossil fuels, but also increasing taxation on their consumption and production, for instance in China, Saudi Arabia, South Africa and India.
This nascent positive shift of public money from fossil fuels to clean energy must occur at a much faster rate for the G20 to get on track to meeting the SDGs and climate goals. The working paper concludes with recommendations to the G20 countries for learning from each others' efforts undertaking reforms while protecting vulnerable groups and ensuring a just transition for workers and communities currently dependent on fossil fuels.
Additional downloads
You might also be interested in
How Indonesia's Incoming President Can Advance the Transition to Clean Energy
With Prabowo Subianto inaugurated as Indonesia’s President, speculation abounds about the new administration’s commitment to the clean energy transition and climate targets, given Prabowo’s positioning as the “continuity candidate.” The question is, what, exactly, will be continued?
G20 Governments are Spending Three Times as Much on Fossil Fuels as Renewables
G20 governments are spending three times as much on fossil fuels as renewables, research by the International Institute for Sustainable Development shows.
Unlocking Clean Power for All
This report uses tipping point theory to advise where public funding can be strategically directed to catalyze renewable energy deployment in developing and emerging economies.
Public Financial Support for Renewable Power Generation and Integration in the G20 Countries
G20 governments provided at least USD 168 billion in public financial support for renewable power in 2023, less than one third of G20 fossil fuel subsidies that year.