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Response to Environmental Audit Committee report on energy subsidies

Written by Shelagh Whitley

​The Overseas Development Institute's Shelagh Whitley gave expert testimony to the Environmental Audit Committee (EAC) during its hearings on energy subsidies. The EAC released it's findings on 2nd December.

Shelagh, a Research Fellow at the ODI and expert on fossil fuel subsidies, said:

“We strongly welcome the Environmental Audit Committee’s recommendations on tackling the UK’s multi-billion pound bill for fossil fuel subsidies.  It is time for every government to send a clear signal that carbon emissions will be penalised, not subsidised.

The UK government, which is reported as spending £12bn on energy subsidies, should carefully consider the Committee’s recommendations. In particular, it should review the transparency of reporting on the scale of subsidies, and set a target for reducing support to fossil fuels. As the Committee’s report points out, the favourable tax treatment of fracking and North Sea gas and oil production could effectively be counted as subsidisation.   Overseas, the UK government should focus on supporting countries’ efforts to eliminate fossil fuel subsidies while protecting the poor.”

Key facts:

For every US$6 spent globally on fossil fuel subsidies in 2011, only US$1 of support went to renewable energy.

From 2008 to 2011 the top rich-country emitters invested twice as much in fossil fuel projects via development banks than they did in clean energy projects.

Many countries continue to pour money into fossil fuel subsidies, with average support across the richest, high-carbon economies running at $112 per adult.