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Removing subsidies on fossil fuel production-I: Three quarters of reserves will be unburnable
Feb 15: Even though the Trump Administration is planning to pull in the opposing direction, there is a growing volume of data that more steps are needed to keep the globe from warming beyond the two degree mark.
8Around three quarters of existing fossil fuel reserves will have to stay undergound to be able to keep global warming at two degrees, the argument goes.
8A paper is now claiming that ending ending subsidies to fossil fuel production is the missing piece of a comprehensive climate action plan.
8To stay on track with the global warming target, the world needs both supply-side policies (such as removal of fossil fuel production subsidies, moratoriums and “no-go zones” or coal phase-out) and demand-side initiatives (such as carbon pricing, removal of fossil fuel consumption subsidies, or fuel and energy efficiency standards), it is argued.
8A recent estimate of direct spending and tax breaks to fossil fuel production in the G20 countries alone placed the figure at USD 70 billion per year on average in 2013 and 2014
8The paper identifies a spate of oil and gas fields which are unviable without government support
8The argument is that production subsidies skew energy markets—they act as a negative carbon tax, artificially lowering the cost of producing more oil, coal and gas, that can be passed through in the form of lower market prices, encouraging more fossil fuel consumption and emissions.
8These market distortions can in turn make investment in energy efficiency and clean alternatives seem less competitive.
8The subsidy removal is modelled as instantaneous around the globe, and the modelling period is 2017–2050 and the resulting impacts in terms of both emissions and reserves that would become uneconomical to produce are documented.
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