World leaders attended the International Climate and Energy Summit on Oct. 2, 2023, hosted by Spain and the International Energy Agency (IEA) in order to build support behind efforts to limit global warming by 1.5 degrees Celsius. In anticipation of COP28 in November, the summit put forth a call for an international coalition to phase out fossil fuels, among other major targets to focus on at the UN conference.
The meeting included officials from 35 countries across five continents and included input from industry, civil society, and youth organizations as well.
Five major objectives that were put forth are reflected in the IEA’s recent Net Zero Roadmap, which emphasizes the rapid growth of renewable energy and global cooperation for a clean energy transition. Objectives include the goal of tripling renewable energy capacity and doubling the rate of global energy intensity improvements by 2030, while recognizing that scaled-up investment in developing economies must take place to achieve the 1.5-degree limit.
The summit also called for an orderly decline in the use of fossil fuels and asserted the critical role of the fossil fuel industry in reducing methane emissions by 75% by 2030.
An important step in phasing out fossil fuels includes phasing out the government practice of subsidizing and offering tax breaks to the industry. Some efforts have been made towards this goal, including Canada’s release of guidelines for eliminating subsidies earlier this year. The Netherlands has called for an international coalition towards phasing out subsidies, and Spain’s energy minister, Teresa Ribera has reportedly expressed support for this petition.
Impact of Reducing Fossil Fuel Subsidies on Lowering Carbon Emissions
The concept of phasing out fossil fuel subsidies to decrease international emissions is not a new one. The G20 called for a phase-out of inefficient fossil fuel subsidies in 2009 and reaffirmed this goal again in 2012.
In 2015, the Institute for Sustainable Development and the Nordic Council of Ministers released a report that revealed the massive potential impact that was possible in reducing emissions before 2020. According to the report, if fossil fuel subsidies had been removed between 2015 and 2020, worldwide emissions would have been reduced by 11%. Further, if 30% of the money saved from phasing out fossil fuel subsidies had been invested in renewable energy and energy efficiency, emissions would have been reduced by 18% on average for each country.
Fossil fuel subsidies were initially implemented to protect consumers by keeping fuel prices low. But, according to the International Monetary Fund, they are not as effective when considering their cost in terms of pollution, disproportionately benefitting high-income households, and overall inefficient allocation of an economy’s resources.
According to the IEA summit, phasing out fossil fuels also includes the end of new approvals for unabated coal-fired power plants and safeguarding energy security and economically feasible pathways. As renewable energy alternatives to fossil fuels become increasingly more affordable, the IEA promotes scaled-up investment in the energy transition, ensuring that clean energy is also available for low and middle-income countries.