Getting rid of massive subsidies for oil, gas and coal will not significantly curb carbon pollution or speed the transition to a greener global economy, researchers said Wednesday, challenging widely held assumptions.
“Unfortunately, it is not the silver bullet many had hoped,” they said in a statement.
“Removing fossil fuel subsidies would only slightly slow the growth of CO2 emissions”, which are on track to increase for at least another decade, they added.
“By 2030, emissions would only be one-to-five percent lower than if subsidies had been maintained.”
For fossil fuel producers, subsidies can take the form of tax breaks, cheap loans, protection from competitors, or favourable trade restrictions. For consumers, they generally result in below-market prices for oil, gas or electricity.
The intergovernmental International Energy Agency (IEA) estimated the value of fossil fuel consumption subsidies in 2016 at about $260 billion (212 billion euros), down from $310 billion the year before.
Electricity and oil each accounted for just over $100 billion, with natural gas topping $50 billion. Coal subsidies were only about $2 billion.
On the production side, an analysis by the London-based Overseas Development Institute and NGO Oil Change International found upwards of $70 billion a year in national subsidies for the oil, gas and coal sectors.
The new findings, published in the journal Nature, clash head on with the common view that fossil fuel subsidies jeopardize the Paris climate treaty goal of capping global warming below two degrees Celsius (3.6 degrees Fahrenheit).