June 29, 2010

Phasing out fossil fuel subsidies

World leaders gathered at the G20 Summit in Toronto over the weekend reiterated their pledge to phase out "inefficient" fossil fuel subsidies, after attempts to water down the commitment were resisted.
There had been concerns that the G20 could back away from its earlier pledge to phase out fossil fuel subsidies estimated to be worth $550bn a year after a leaked draft of the communiqué released at the end of the summit showed that efforts to cut back on such subsidies would be "voluntary" and "member-specific ".
However, the final version of the text released yesterday afternoon axed any reference to the measures being voluntary.
"We welcome the work of Finance and Energy Ministers in delivering implementation strategies and timeframes, based on national circumstances, for the rationalization and phase out over the medium term of inefficient fossil fuel subsidies that encourage wasteful consumption, taking into account vulnerable groups and their development needs," the text stated. "We also encourage continued and full implementation of country specific strategies and will continue to review progress towards this commitment at upcoming summits."
Sources at the summit told news agency Reuters that the language had been strengthened at the last minute at the insistence of the US, which first proposed the phasing out of subsidies at last year's meeting of the G20 in Pittsburgh and has made the plan a key component of its climate change strategy.
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