OECD calls for reform of fossil fuel subsidies

OECD calls for reform of fossil fuel subsidies

The OECD (Organisation for Economic Cooperation and Development) called on Monday for the reform of public support measures for fossil fuels which, even if their market share seems to be decreasing, remain expensive and detrimental to the fight against global warming. These subsidies, which promote the production or consumption of these fuels, amounted to 160-200 billion dollars per year in the period 2010-2014, and went primarily towards petroleum products, according to the OECD, which listed almost 800 measures applied by 34 OECD countries and 6 developing countries (South Africa, Brazil, China, India, Indonesia, Russia).

“Not only do fossil fuel subsidies jeopardise efforts to mitigate climate change, but they are also costly and distortive,” the international organisation wrote in their “Companion to the Inventory of Support Measures for Fossil Fuels.” “These subsidies accentuate the risk that long-lived capital assets end up locking in polluting technologies for years, decades, even” continues the report.

Without passing judgement on the merits of each of the measures identified, the organisation points to the existence of more targeted alternatives that would achieve the same objectives. For example, if one such objective is to assist households, the OECD considers it more effective to provide direct income support and improve the energy efficiency of buildings and appliances, rather than to encourage energy consumption through subsidised utility bills.

(Source: Belga)


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