Global and regional impact of subsidy removal and NDCs on CO2 emissions from fossil fuels and industry under low oil prices. Graphic: Jewell, et al., 2018 / Nature

By Chelsea Harvey
8 February 2018

(ClimateWire) – Ending financial assistance for fossil fuel companies has long been discussed as a tactic to reduce greenhouse gas emissions and encourage investment in renewables. Oil, natural gas and coal companies worldwide receive hundreds of billions of dollars each year in tax breaks or other subsidies—and some experts argue that cutting them off would drive prices up and consumption down.

It's a simple idea, but one that's been sparsely investigated by scientists. Now, new research suggests that removing fossil fuel subsidies might not have the global effect that some climate advocates were hoping for.

The study, published yesterday in the journal Nature, used an ensemble of five models to investigate the impact of ending fossil fuel subsidies worldwide by the year 2030, assuming both high and low oil prices in the future. Doing so would have a modest impact on global greenhouse gas emissions, the research finds, cutting carbon dioxide emissions by a half-billion to 2 billion metric tons annually.

Currently, global carbon dioxide emissions come to about 40 billion tons each year. In the meantime, the national pledges submitted under the Paris climate agreement would add up to an annual decrease of about 4 billion to 8 billion tons.

In other words, the effect of removing fossil fuel subsidies would fall far short of the reductions promised in the Paris Agreement—which many experts calculate are still not enough to stay within the desired 1.5- or 2-degree-Celsius temperature target.

"I think this will be surprising news to some people, because folks had just imagined that if you did subsidy reform, that would be beneficial to climate," said David Victor, co-director of the Laboratory on International Law and Regulation at the University of California, San Diego, who was not a part of the new study. "But nobody had actually worked out the analysis, and that's the contribution of this paper." [more]

New Study Finds Cutting Oil Subsidies Will Not Stop Climate Change

ABSTRACT: Hopes are high that removing fossil fuel subsidies could help to mitigate climate change by discouraging inefficient energy consumption and levelling the playing field for renewable energy1,2,3. In September 2016, the G20 countries re-affirmed their 2009 commitment (at the G20 Leaders’ Summit) to phase out fossil fuel subsidies4,5 and many national governments are using today’s low oil prices as an opportunity to do so6,7,8,9. In practical terms, this means abandoning policies that decrease the price of fossil fuels and electricity generated from fossil fuels to below normal market prices10,11. However, whether the removal of subsidies, even if implemented worldwide, would have a large impact on climate change mitigation has not been systematically explored. Here we show that removing fossil fuel subsidies would have an unexpectedly small impact on global energy demand and carbon dioxide emissions and would not increase renewable energy use by 2030. Subsidy removal would reduce the carbon price necessary to stabilize greenhouse gas concentration at 550 parts per million by only 2–12 per cent under low oil prices. Removing subsidies in most regions would deliver smaller emission reductions than the Paris Agreement (2015) climate pledges and in some regions global subsidy removal may actually lead to an increase in emissions, owing to either coal replacing subsidized oil and natural gas or natural-gas use shifting from subsidizing, energy-exporting regions to non-subsidizing, importing regions. Our results show that subsidy removal would result in the largest CO2 emission reductions in high-income oil- and gas-exporting regions, where the reductions would exceed the climate pledges of these regions and where subsidy removal would affect fewer people living below the poverty line than in lower-income regions.

 Limited emission reductions from fuel subsidy removal except in energy-exporting regions


  1. Anonymous said...

    I've yet to see a comprehensive study on what it will actually require to "stop global warming". As far as I know, it does not exist.

    The nomenclature is inaccurate for starters. There is no stopping global warming, it will now continue for at least a thousand years due to the longevity of gasses trapped in the atmosphere, ocean saturation, permafrost melt and Earth's massive terraforming.

    As I've long said, "you can't replace the missing ice".

    Even if all industries, business and human activity stopped worldwide and nothing was added to the atmosphere from any kind of human activity - global warming would not stop. That is the big lie that is constantly being misreported (or covered up).

    Renewables like solar, hydro, wind, electric vehicles, and all the Scribblers in the world refuse to believe that civilization continues to cause global warming - and that at our present pace, size and activity, there is no stopping it, ever, by building even more civilization.

    Humankind would need to do nothing except mitigation efforts (reforestation for example) for a thousand years, exacerbating nothing, to stop global warming and regain the essential energy balance of the planetary systems. Global population levels would need to drop under 2 or 3 billion.

    That discussion will never, ever be on the table because it means the death of civilization as we know it. So all these other discussions of "what we can or should do" are just a charade, moving the deck chairs on the Titanic, and they will go on and on and on like a Celine Dion song until planetary habitability declines so badly that civilization collapses anyway from our inactions and repeated mistakes.

    That is all we can hope for now, because collapse is now literally "baked in" for our civilization. We do not have the wherewithal to do the right thing, or even have a brutally honest discussion about what we are really facing. ~Survival Acres~  


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