Yahoo News 9 Jun 10;
PARIS (AFP) – Phasing out fossil fuel subsidies should cut greenhouse gas emissions by 10 percent from levels they would otherwise reach in 2050, the OECD said Wednesday.
"Many governments are giving subsidies to fossil fuel production and consumption that encourage greenhouse gas emissions at the same time as they are spending on projects that promote clean energy," Angel Gurria, head of the Organisation for Economic Cooperation and Development, said in a statement.
"This is a wasteful use of scarce budget resources."
The OECD-affiliated International Energy Agency, which seeks to coordinate energy policy among industrialised nations, estimates that subsidies to support fossil fuel consumption in emerging and development countries came to 557 billion dollars (461 billion euros at current rates) in 2008.
According to some estimates, other subsidies to subsidise production could amount to as much as 100 billion dollars a year.
The OECD in its analysis found that fossil fuel consumption subsidies usually benefit richer rather than poorer households, since the latter often cannot afford cars.
The study found that in Poland, France and Britain governments have successfully reformed subsidies for coal production.
Indonesia is reducing subsidies for fossil fuel consumption, it added.
