Ending the world’s fossil fuel subsidies would reduce global CO2 emissions by 0.5 to 2.2 gigatonnes (Gt) per year by 2030, a new study says.
The research, published by Nature, concludes that the removal of subsidies would lead to bigger emissions reductions in oil and gas exporting regions, such as Russia, Latin America and the Middle East, than promised by their Paris Agreement pledges.
In all other regions, removing fossil fuel subsidies would not have as large an impact as the Paris pledges, the lead author tells Carbon Brief.
However, a researcher not linked to the report tells Carbon Brief that comparing the effects of subsidy removal to the Paris pledges is “unnecessary and inappropriate”, since these economy-wide pledges are generally composed of many other policies and actions than just subsidy removal.
Global removal
Ending financial support for fossil fuels has long been cited as an important way to reduce the world’s greenhouse gas emissions. Both the G7 and the G20 have pledged to end “inefficient” fossil fuel subsidies – the G7 by 2025, and the G20 with no fixed end-date.
The new research analyses the implications for mitigation efforts in different regions of the world of removing all fossil fuel subsidies.
The researchers built a global dataset of subsidies under both high and low oil prices, and worked with five different modelling teams to look at the impact of removing these subsidies on emissions.
The study found the removal of subsidies would reduce the globe’s CO2 emissions by 0.5-2.2Gt per year compared to a business-as-usual scenario by 2030, equivalent to a 1-5% reduction.(Note though, that under a business-as-usual case overall emissions would increase substantially even with this reduction).
The graph below shows the impact of subsidy removal on emissions in each of the five models used in the study, compared to each model’s baseline, for low (left) and high (right) oil prices.
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