Despite the significant rhetoric from global leaders regarding addressing climate change through the reduction of dependence on non-renewable energy sources, a recent report has unveiled that the world’s top 20 economies allocated an unprecedented amount of funds towards the combustion of fossil fuels in the previous year.
G20 nations spent a whopping $1.4 trillion on coal, oil and gas in 2022, the International Institute for Sustainable Development (IISD) think tank revealed in its report.

The report comes as stark contrast to promises made by world leaders to phase out “inefficient” fossil fuel subsidies at the Cop26 climate summit in Glasgow two years ago.
“These figures are a stark reminder of the massive amounts of public money G20 governments continue to pour into fossil fuels – despite the increasingly devastating impacts of climate change,” complained Tara Laan, a senior associate with the IISD.

Alarming trend on fossil fuel subsidies
Over the last four years, the amount of public money that goes into fossil fuel in the world’s 20 biggest economies has risen by twofold.

According to the IISD report, the G20 governments spent $322 billion in investments into fossil fuel projects last year, around $1 trillion in subsidies and above $50 billion in loans from public institutions.

The amount was double what the G20 countries spent in 2019.

Reasons
Around two years ago at the Glasgow summit, world leaders agreed to phase out fossil fuel subsidies and promote transition to green energy. However, the ramifications caused by the COVID-19 pandemic and the Russia-Ukraine war seem to have derailed the global plans to phase out fossil fuels.

The efforts to increase reliance on green energy have generally led to an increase in the cost of living worldwide, causing governments to develop cold feet.

To check massive inflation, governments had to intervene to bring the prices down by rolling out massive subsidy initiatives.

Experts issue warning
In February, an International Energy Agency report highlighted the concerning extent of fossil fuel subsidies in 2022.

However, it acknowledged that certain measures might be justified for social or political reasons “given the hardship that full exposure to market-driven prices could have caused”.

In June, a World Bank report revealed that “by underpricing fossil fuels, governments not only incentivise overuse, but also perpetuate inefficient polluting technologies and entrench inequality”.

Furthermore, the authors of the report noted that approximately three-quarters of all energy sector subsidies are directed towards fossil fuels.