G7 nations spend $100bn every year supporting fossil fuel industry

The world’s richest countries spend at least $100bn (£75bn) a year supporting the production and consumption of oil, gas and coal, despite promising to end subsidies by 2025.

That is according to a new study led by researchers at the Overseas Development Institute, which ranks G7 governments on their progress towards ending support for the fossil fuel industry.

France is the top-rated country based on seven key indicators, followed by Germany and Canada, while the US scores lowest after backtracking on previous subsidy pledges.

The UK is ranked fourth and is the worst-performing country for transparency, with the government continuing to deny it provides subsidies, while also committing to end them at the same time.

This comes ahead of the G7 summit in Canada later this week, with the study warning there is a serious risk these nations will fail to deliver their commitments to phase-out subsidies by 2025.

“Despite repeated pledges to eliminate fossil fuel subsides, G7 countries are continuing to subsidise oil, gas and coal, fuelling dangerous climate change with tax-payers’ money,” study lead author Shelagh Whitley, said.

The study rates G7 countries on their support for fossil fuel exploration, coal mining, oil and gas production, fossil fuel-based power, fossil fuel use, transparency and pledges and commitments.

Their rankings are shown below:

It was found that G7 governments provided at least $81bn in fiscal support in 2015 and 2016, as well as $20bn in public finance for fossil fuel production and consumption around the world.

Approximately 64% of this fiscal support was for use in transport, households, industry and other sectors, contradicting the view that consumption subsidies are only a challenge for developing countries.

The researchers said G7 nations must publish comprehensive fossil fuel subsidy peer reviews by next year at the latest if they are to meet their 2025 commitments.

They will also have to establish country-level plans to end subsidies that have negative environmental impacts, and ensure subsidies for green energy transition do not support fossil fuels.

“G7 governments committed to phase-out fossil fuel subsidies back in 2009, but since then have made very little progress,” report co-author, Ivetta Gerasimchuk, said. “The richest countries must demonstrate leadership.”

Image credit: Shutterstock

Graphic credit: Overseas Development Institute