Fossil-Fuel Subsidies Must End: Despite claims to the contrary, eliminating them would have a significant effect in addressing the climate crisis
When it comes to tackling the climate crisis, ending $400 billion of annual subsidies to the fossil-fuel industry worldwide seems like a no-brainer. For the past decade, world leaders have been resolving and reaffirming the need to phase them out. All of the 2020 Democratic presidential candidates have committed to eliminating fossil-fuel subsidies, and the vast majority of the American public supports doing so. International financial institutions such as the World Bank and International Monetary Fund have joined the chorus, pointing to the benefits of reform.
In 2018, however, a group of researchers questioned the magnitude of the climate benefits of subsidy reform, reporting that their simulations showed its effect would be “limited” and “small.” Stories in the press began asking whether such subsidies are such a big deal after all.
We think this is wrong. In a new paper in the journal Nature, we make the case that they do matter—a lot.