Energy
0

OECD Urges Deeper Cuts of Fuel Subsidies

OECD Urges Deeper Cuts of Fuel SubsidiesOECD Urges Deeper Cuts of Fuel Subsidies

Major nations seem to be reducing fossil fuel subsidies but still have "ample scope" for deeper cuts in recent support of up to $200 billion a year, the Organization for Economic Cooperation and Development said on Monday.

Reductions in damaging subsidies for oil, coal and natural gas would reduce air pollution, save cash and help a shift to greener energies before a Nov. 30-Dec. 11 UN summit in Paris on limiting climate change, it said.

Updating an inventory of subsidies, OECD estimated the annual value for 2010-14 at between $160 billion and $200 billion, mostly for petroleum products, in the 34 OECD nations and China, India, Brazil, Russia, Indonesia and South Africa, Reuters reported.

"Support now seems to follow a downward trend after having peaked twice in 2008 and 2011-12," the organization said, without giving exact annual figures.

The Group of 20 agreed as long ago as 2009 to phase out inefficient subsidies for fossil fuels.

Among recent reforms, OECD pointed to cuts in support by India and Mexico for diesel and gasoline. A fall in oil prices has made it easier to phase out support.

"There is clearly ample scope to save scarce budgetary resources and improve the environment in both advanced and emerging economies" with deeper cuts, OECD Secretary-General Angel Gurria said in a statement.

The organization said its numbers do not cover all factors causing artificially lower prices in emerging nations. And not all the subsidies were "unambiguously inefficient".

Separately, environmental group Greenpeace said on Monday that the world could shift to 100% renewable energy by 2050. Investments of $1 trillion a year would be offset by savings of $1.07 trillion, partly because wind and solar power are free of fuel costs once set up, unlike fossil fuels, it said in a report.

 

Financialtribune.com