Fossil fuel subsidies in focus at climate talks

Dec 03, 2012 by Karl Ritter
United Nations Convention on Climate Change Executive Secretary Christiana Figueres, second left, speaks during a press conference along side Qatar's Deputy Prime Minister and president of the 18th United Nations Convention on Climate Change, Abdullah bin Hamad Al-Attiyah, second and on screens, right, in Doha, Qatar,Monday, Dec. 3, 2012. (AP Photo/Osama Faisal)

(AP)—Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump.

"Thank God that our country is an oil producer and the price of gasoline is one of the lowest," al-Kubaisi said, filling up his Toyota Land Cruiser at a gas station in Doha. "God has given us a blessing."

To those looking for a global response to change, it's more like a curse.

Qatar—the host of U.N. that entered their final week Monday—is among dozens of countries that keep gas prices artificially low through subsidies that exceeded $500 billion globally last year. Renewable energy worldwide received six times less support—an imbalance that is just starting to earn attention in the divisive negotiations on curbing the blamed for heating the planet.

"We need to stop funding the problem, and start funding the solution," said Steve Kretzmann, of Oil Change International, an for clean energy.

His group presented research Monday showing that in addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to the fossil fuel industry. The U.S. figure was $13 billion.

The Paris-based Organization for and Development has calculated that removing fossil fuel subsidies could reduce carbon emissions by more than 10 percent by 2050.

Yet the argument is just recently gaining traction in , which in two decades have failed to halt the rising temperatures that are melting , raising sea levels and shifting with impacts on and floods.

In Doha, the talks have been slowed by wrangling over financial aid to help poor countries cope with global warming and how to divide carbon emissions rights until 2020 when a new planned is supposed to enter force. Calls are now intensifying to include fossil fuel subsidies as a key part of the discussion.

"I think it is manifestly clear ... that this is a massive missing piece of the climate change jigsaw puzzle," said Tim Groser, New Zealand's minister for climate change.

He is spearheading an initiative backed by Scandinavian countries and some developing countries to put fuel subsidies on the agenda in various forums, citing the U.N. talks as a "natural home" for the debate.

The G-20 called for their elimination in 2009, and the issue also came up at the U.N. earth summit in Rio de Janeiro earlier this year. Frustrated that not much has happened since, European Union climate commissioner Connie Hedegaard said Monday she planned to raise the issue with environment ministers on the sidelines of the talks in Doha.

Local and international activists march to demand urgent action to address climate change at the U.N. climate talks in Doha, Qatar, Saturday , Dec. 1, 2012. (AP Photo/Osama Faisal)

Many developing countries are positive toward phasing out fossil fuel subsidies, not just to protect the climate but to balance budgets. Subsidies introduced as a form of welfare benefit decades ago have become an increasing burden to many countries as oil prices soar.

"We are reviewing the subsidy periodically in the context of the total economy for Qatar," the tiny Persian gulf country's energy minister, Mohammed bin Saleh al-Sada, told reporters Monday.

Qatar's National Development Strategy 2011-2016 states it more bluntly, saying fuel subsides are "at odds with the aspirations" and sustainability objectives of the wealthy emirate.

The problem is that getting rid of them comes with a heavy political price.

When Jordan raised fuel prices last month, angry crowds poured into the streets, torching police cars, government offices and private banks in the most sustained protests to hit the country since the start of the Arab unrest. One person was killed and 75 others were injured in the violence.

Nigeria, Indonesia, India and Sudan have also seen violent protests this year as governments tried to bring fuel prices closer to market rates.

Iran has used a phased approach to lift fuel subsidies over the past several years, but its pump prices remain among the cheapest in the world.

"People perceive it as something that the government is taking away from them," said Kretzmann. "The trick is we need to do it in a way that doesn't harm the poor."

The International Energy Agency found in 2010 that fuel subsidies are not an effective measure against poverty because only 8 percent of such subsidies reached the bottom 20 percent of income earners.

The IEA, which only looked at consumption subsidies, this year said they "remain most prevalent in the Middle East and North Africa, where momentum toward their reform appears to have been lost."

In the U.S., environmental groups say fossil fuel subsidies include tax breaks, the foreign tax credit and the credit for production of nonconventional fuels.

Industry groups, like the Independent Petroleum Association of America, are against removing such support, saying that would harm smaller companies, rather than the big oil giants.

In Doha, Mohammed Adow, a climate activist with Christian Aid, called all fuel subsidies "reckless and dangerous," but described removing subsidies on the production side as "low-hanging fruit" for governments if they are serious about dealing with .

"It's going to oil and coal companies that don't need it in the first place," he said.

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ScooterG
3.1 / 5 (17) Dec 03, 2012
"The trick is we need to do it in a way that doesn't harm the poor."

If you end tax incentives/breaks for oil producers, the pump price will go up.

To raise pump prices without harming the poor would indeed be a trick.
FrankHerbert
2.3 / 5 (9) Dec 03, 2012
Get rid of the subsidies, enact fuel stamps.

Problem solved :)
Tseihta
4.2 / 5 (5) Dec 03, 2012
"Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump."

Hmmm seems more like a gift from below....
Howhot
1.8 / 5 (5) Dec 03, 2012
I can not understand anyone arguing in agreement with a bunch of wingbats that have loyalties to the Oil industry. To them, anything that supports oil is a good thing. Is it?

The oil industry workers need to change that mind set. They ARE the cause of global warming, they ARE the destroyers of oceans, they ARE the cause of total environmental collapse.

For the sake of humanity, and the globe, all forces need to focus on CO2 reduction and removal from the air.
Egleton
2.6 / 5 (5) Dec 04, 2012
We are going to sail right past 2C increase and on to 5 to 6C. (Average!)I wonder how lucky these hot countries are going to feel then.
I shall try to keep it simple. You are going to starve.
rubberman
3 / 5 (6) Dec 04, 2012
The bottom line on coal and oil, is that regardless of whatever usage policies any countries try to enact, we will use them until they are gone. Politics and market pressures will not allow it to go any other way. If any governments were truly serious about mitigation, there would be no new coal power plants and no new oil wells being surveyed. I have sadly resigned myself to this
fact and really would like to be wrong.

Entrenched dogma seems to hold the true scepter of power in todays world.
ScooterG
3.2 / 5 (11) Dec 04, 2012
But let's not forget - the government collects a huge amount of revenue from oil/gas/coal in the form of leases, royalties, and taxes.

My family has benefited enormously from the oil/gas industry, as have many millions of others. Enormous wealth has been created and everyone benefits from that.

And it's easy to take for granted the fact that we can drive anywhere we want to in the US thanks to an ample supply of clean, quality fuel along the way.

I say "Thank you big oil...you have enriched my life, and the lives of many millions of others - even those who despise you."
Noumenon
3.5 / 5 (11) Dec 07, 2012
The bottom line on coal and oil, is that regardless of whatever usage policies any countries try to enact, we will use them until they are gone. Politics and market pressures will not allow it to go any other way. If any governments were truly serious about mitigation, there would be no new coal power plants and no new oil wells being surveyed. I have sadly resigned myself to this
fact and really would like to be wrong.

Entrenched dogma seems to hold the true scepter of power in todays world.


This is correct, as I've been trying to explain here for years. It will take peak-oil or at least an increase in cost of that commodity before alternatives can effectively compete on a meaningful scale. Regulations on use will only delay this occurrence .

To control oil use to an extent necessary to artificially cause the price to increase, requires gov control over human behavior. Desire of freedom is a force much to strong to overcome. Personally I would rather go down with the ship
extinct
1 / 5 (1) Dec 09, 2012
Yeah, as if someone at a UN convention is capable of bringing about fundamental progress or change? Keep dreaming. Their total and complete lack of imagination prevent them from seeing the missing pieces of the puzzle, like hemp. As biomass, it would counteract gigatons of atmospheric CO2 annually. As a renewable and clean fuel, it would replace non-renewable dirty fuels like diesel and gasoline. But, alas, it is illegal because capitalism, now in its cancer stage, cannot profit from hemp when everyone can grow it on their own land. Since they cannot compete with it, they make it illegal. Very psychopathic behavior. So let's drag it out some more and heat up the planet some more, because we're too schizophrenic to actually improve things. Pass the buck on, to your grandchildren.