Page 17 - FSUOGM Week 09 2023

FSUOGM ENERGY TRANSITION FSUOGM

Fossil fuel consumption subsidies in

2022 were at record high of $1 trillion

XXXXXXX ACCORDING to the International Energy inflation, while still trying to encourage the
Agency (IEA), worldwide subsidies for fossil fuel energy transition. The fossil fuel spending by
The surge was the consumption increased dramatically in 2022, world governments in 2022 – not just consump-
result of market surpassing $1 trillion for the first time. tion subsidies but total spending – was more
volatility. This surge in subsidies was caused by energy than twice the total investment in renewable
market turbulence, which led to international energy sources, according to BloombergNEF.
fuel prices soaring well above what many con- These rising consumption subsidies indeed
sumers paid. Consumption subsidies are energy contrast sharply with the Glasgow Climate Pact,
price cuts for consumers, for example setting which called for countries to phase out inefficient
fixed prices of retail gasoline. fossil fuel subsidies while providing targeted
The 2022 subsidies, driven by the global support to the poorest and most vulnerable.
energy crisis resulting from Russia's invasion of The November 2021 Glasgow Climate Pact
Ukraine, were twice the levels seen in 2021 and effectively proposed to accelerate efforts to close
almost five times those in 2020. This is according the 2030 emissions gap by asking countries to
to the IEA in a just published report, Fossil Fuel align their commitments with Paris Agree-
Consumption Subsidies 2022. ment goals and with a just transition to net zero,
However, the IEA found that the government according to the World Resources Institute.
measures taken to protect consumers were not The pact called on countries to “phase out
well-targeted, and although they may have … inefficient fossil fuel subsidies, while provid-
helped to alleviate the impact of skyrocketing ing targeted support to the poorest and most
costs, they artificially maintained the competi- vulnerable”.
tiveness of fossil fuels compared with low-emis- The IEA found that oil subsidies grew by
sions alternatives. around 85%, while natural gas and electricity
The finding of the report underlines the consumption subsidies more than doubled. As
problem of governments dealing with high fuel noted in the latest IEA’s World Energy Outlook,

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