Americas, Planet, Asia Pacific, Climate Change

G20 failing on coal subsidy targets

Responsible Business | Jul 01, 2019

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G20 governments have more than doubled subsidies to coal power over the past three years, flying in the face of their collective commitments to phase out support to the sector, according to a new report from a coalition of think tanks.

The G20 meets this week in Osaka. The report follows criticism from environmental activists over the omission of references to climate change and decarbonisation from the G20 communiqués, which have been interpreted as the hosts, Japan, acquiescing to demands from the US government. The Trump administration has stated that it intends to withdraw from the 2015 Paris climate accord.

The Japanese government has come under criticism for continuing to support coal power, a major source of carbon emissions and air pollution. Tokyo has recently voiced a desire to achieve carbon neutrality by 2050, and several major financial institutions have said that they will join their global counterparts in divesting from coal.

Researchers from the Overseas Development Initiative, Oil Change International, the International Institute for Sustainable Development and the Natural Resources Defense Council tracked public financial support for coal production and consumption in the 20 largest world economies. They found that combined they are currently providing around US$65 billion per year to the coal sector.

Of that figure, US$28 billion is being spent through public finance institutions, such as development banks and export credit agencies, US$15 billion through budget allocations and tax exemptions, and US$21 billion through state-owned mining and utility companies. The authors warned that the actual figure is likely to be higher, as several countries are not transparent about their subsidy programmes.

Japan remains one of the largest providers of support to coal power, spending at least US$5 billion on coal overseas, the report says.

Ipek Gençsü, research fellow at ODI and lead author of the report, said: “It has now been ten years since the G20 committed to phasing out subsidies to fossil fuels, yet astonishingly some governments are actually increasing the amount they give to coal power plants. Momentum is growing around the world for governments to take urgent action to tackle the climate crisis. Ending subsidies to coal would bring environmental, social and economic benefits to all and help set a level playing field for clean energy.”

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