A pledge to end fossil-fuel subsidies

The Group of 20 summit this week in Brisbane, Australia, is an opportunity to galvanize international action on climate change if leaders agree to end subsidies for exploration for oil, gas and coal.

The scale of these subsidies is not widely recognized. According to a new report by the Overseas Development Institute and Oil Change International, G-20 countries now spend about $88 billion annually on identifying and expanding fossil-fuel reserves. Given that two-thirds of known reserves cannot be exploited if the world is to remain within the internationally agreed 2-degree Celsius global warming threshold, this is a bad investment for taxpayers and the planet. As highlighted in the recent Global Commission on the Economy and Climate report, governments should be increasing the price on carbon emissions. Without subsidies, investment in fossil-fuel exploration would dry up, helping to create conditions for a low-carbon energy transition.

Five years ago, G-20 leaders pledged to cut fossil-fuel subsidies. They now must redeem that pledge. Setting a timetable for phasing out all subsidies for fossil-fuel exploration would be smart economics. It would also establish the G-20 as a credible force in international efforts to secure an ambitious global deal on climate change.

Jeffrey Sachs , New York