Page 12 - AsianOil Week 08 2023

AsianOil POLICY AsianOil

Fossil fuel consumption subsidies in

2022 were at record high of $1 trillion

XXX ACCORDING to the International Energy The finding of the report underlines the prob-
Agency (IEA), worldwide subsidies for fossil fuel lem of governments dealing with high fuel infla-
The reason was consumption increased dramatically in 2022, tion, while still trying to encourage the energy
unprecedented market surpassing $1 trillion for the first time. transition. The fossil fuel spending by world
turbulence. This surge in subsidies was caused by energy governments in 2022 – not just consumption
market turbulence, which led to international subsidies but total spending – was more than
fuel prices soaring well above what many con- twice the total investment in renewable energy
sumers paid. Consumption subsidies are energy sources, according to BloombergNEF.
price cuts for consumers, for example setting These rising consumption subsidies indeed
fixed prices of retail gasoline. contrast sharply with the Glasgow Climate Pact,
The 2022 subsidies, driven by the global which called for countries to phase out inefficient
energy crisis resulting from Russia's invasion of fossil fuel subsidies while providing targeted
Ukraine, were twice the levels seen in 2021 and support to the poorest and most vulnerable.
almost five times those in 2020. This is according The November 2021 Glasgow Climate Pact
to the IEA in a just published report, Fossil Fuel effectively proposed to accelerate efforts to close
Consumption Subsidies 2022. the 2030 emissions gap by asking countries to
However, the IEA found that the government align their commitments with Paris Agree-
measures taken to protect consumers were not ment goals and with a just transition to net zero,
well-targeted, and although they may have according to the World Resources Institute.
helped to alleviate the impact of skyrocketing The pact called on countries to “phase out
costs, they artificially maintained the competi- … inefficient fossil fuel subsidies, while provid-
tiveness of fossil fuels compared with low-emis- ing targeted support to the poorest and most
sions alternatives. vulnerable”.

P12 www. NEWSBASE .com Week 08 24•February•2023