It may seem difficult phase out fossil fuel consumption, with subsidies worldwide soaring as high as the $1 trillion mark for 2002, for the first time.
Appraising this figure in a report releases last weekend, the International Energy Agency [IEA, said efforts to phase out these “inefficient” sources of energy is receiving heavy blow.
Records show that subsidy last year, totaling nearly $1.1 trillion — was almost double that of 2021 levels and almost five times compared to 2020. The previous high was at $752 billion, which was set in 2012.
The record level came amid the global energy crisis triggered by Russia’s military invasion of Ukraine that started a year ago and was also a result of turmoil in energy markets that sent fuel prices in international markets well above what was actually paid by many consumers, it said.
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While natural gas surged 145% to $346 billion, electricity subsidies had the highest share with $399 billion, which is double its level in 2021, the report said. Oil subsidies grew nearly 84% annually to $343 billion from $187 billion last year, while coal tripled to $9 billion from 2021.
The agency also stressed that this is in “sharp contrast” to the goals set by the Cop26 Climate Summit in late 2021, which called on countries to “phase-out… inefficient fossil fuel subsidies, while providing targeted support to the poorest and most vulnerable”.
“Our analysis shows that many of these government measures were not well targeted. And while they may have partially protected customers from skyrocketing costs, they artificially maintained fossil fuels’ competitiveness versus low-emissions alternatives,” the IEA said.
Periods of high and volatile fossil fuel prices are driving the unsustainability of the world’s present energy system and underscore the benefits of energy transitions, the IEA said.
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But these episodes come with significant economic and social cost, and high fossil fuel prices are “no substitute for consistent climate policies. Phasing out fossil fuel subsidies is a fundamental ingredient of successful clean energy transitions,” the report said
By Bosco Agba
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