According to a new report from Oil Change International, the world’s 20 largest economies are undermining their own calls to fight climate change. The report finds that G20 countries provided $88 billion in subsidies last year to help the fossil fuel industry find new oil, gas, and coal reserves to mine.
In 2009, G20 leaders agreed to phase out fossil fuel subsidies by 2020. But it’s clear that most countries are going in the opposite direction, especially the U.S. The government provided $2.6 billion in subsidies for exploration in 2009, which nearly doubled to $5.1 billion by 2013, thanks to a boom in domestic oil and gas production.
That means American drilling and investment tax breaks outrank subsidies in Australia, Russia, and China—countries not generally known for their aggressiveness on climate change. And yet, President Barack Obama has adopted climate change as a part of his agenda and hopes to convince the rest of the world to do the same.
However, this schizophrenia on climate policy is not entirely Obama’s fault. He has called for the elimination of $4 billion in industry tax breaks, but nothing will happen until Congress overturns oil and gas deductions written into the tax code. The Republican-controlled House won’t take up oil subsidy legislation, and Republican senators have filibustered Democrats on multiple occasions.
Fossil fuel subsidies help keep prices artificially low. Countries like China have already promised to set a price on carbon consumption, so industries and consumers begin to internalize the invisible consequences of burning oil and coal. But this won’t work—in the U.S., China, and elsewhere—without phasing out existing tax breaks for polluters, too.