The Organisation for Economic Co-operation and Development (OECD) has released its Inventory of Support Measures for Fossil Fuels 2015. According to the findings, governments of OECD countries and key emerging economies are spending US$160-200 billion annually to support the consumption and production of fossil fuels, reads an organisation’s press release.
The Inventory tracks nearly 800 government spending programmes and tax breaks in all 34 OECD economies, as well as in Brazil, China, India, Indonesia, the Russian Federation and South Africa. Theses subsidies take the form of price reductions for consumers or cost reductions for exploration and exploitation by oil and gas companies. The OECD started tracking these subsidies in 2009, when the Group of 20 (G-20) committed to phasing out “inefficient fossil fuel subsidies.”
Launching the Inventory in Paris, France, on 21 September 2015, OECD Secretary-General Angel Gurría stated that reforming harmful fossil fuel support is “a good place to start” if countries are serious about combating climate change. He explained that governments spend almost twice as much money supporting fossil fuels than is needed to meet the international community’s climate finance objectives.
According to Gurría, the Inventory offers a roadmap to “turn around harmful policies that are a relic of the past, when pollution was still seen as a tolerable side effect of economic growth.”
Data from the Inventory, available online, are accompanied by the ‘OECD Companion to the Inventory of Support Measures for Fossil Fuels 2015.’ In addition to presenting the methodology and sources of the inventory, the Companion reviews the various fossil-fuel subsidy reform initiatives happening at the international level and provides policy recommendations. It notes the opportunity that low oil prices create for reforming subsidies and highlights that energy efficiency measures can achieve many of the ultimate goals of consumption subsidies, but more effectively.