G-20 Reaffirms Commitment to Cut Fossil Fuel Subsidies
November 17, 2010
The White House announced on November 12 that the G-20 leaders have reaffirmed their commitment to phase out fossil fuel subsidies in the medium term. According to the White House, phasing out fossil fuel subsidies is important because it encourages energy conservation, improves energy security, helps meet budget goals, and reduces greenhouse gas emissions. Mexico has already started to phase out motor fuel subsidies, while India has removed controls on gasoline prices and has raised the prices for diesel fuel, kerosene, and liquid petroleum gases. In addition, both Russia and China have initiated programs to raise the price of natural gas paid by their consumers.
In the United States, President Obama is committed to working with Congress to phase out more than $3 billion per year in preferential tax incentives for the coal, oil, and gas industries, consistent with his budget proposals for fiscal years 2010 and 2011. The White House estimates that a gradual multilateral removal of existing fossil fuel subsidies by 2020 could result in a 10% reduction of global greenhouse gas emissions by 2050, relative to business as usual. See the White House announcement and pages 14-15 (PDF pages 18-19) of the leaders' declaration from the G-20 Summit in Seoul.
The G-20 is shorthand for the Group of Twenty Finance Ministers and Central Bank Governors, which was established in 1999 to bring together important industrialized and developing economies to discuss key issues in the global economy. Member countries of the G-20 include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, the Republic of Korea, Turkey, the United Kingdom, and the United States. See the G-20 Web site.