G20 Tackles Fuel Subsidies Again, With Caveats: Draft

Jeff Mason PlanetArk 24 Jun 10;

The Group of 20 major economies will agree to "continue working" to phase out fossil fuel subsidies while allowing member nations to develop their own approaches for doing so, a draft G20 document shows.

The draft version of the summit communique, obtained by Reuters before the G20 leaders meeting in Toronto this weekend, suggests a softening in language from the group's commitment last year to eliminate subsidies for fuels such as oil and gas.

"We reviewed progress made to date in identifying inefficient fossil fuel subsidies that encourage wasteful consumption," said the text of the document, which must be agreed by leaders and could change in the coming days.

"We agree to continue working to develop voluntary, member-specific approaches for the rationalization and phase out of such measures."

Environmentalists pounced on the inclusion of "voluntary, member-specific approaches" as evidence of a move to water down the pledge.

"The Gulf oil disaster has focused minds worldwide on the need to end our oil addiction and begin an energy revolution," said Kumi Naidoo, executive director of environmental group Greenpeace International.

"G20 leaders need to put their money where their mouths are and keep their promise to cut fossil fuel subsidies."

The world's largest economies agreed in September to phase out subsidies for oil and other carbon dioxide-spewing fossil fuels in the "medium term" as part of efforts to combat global warming. The agreement was seen as a victory for U.S. President Barack Obama, who hosted the Pittsburgh summit and wanted to show progress on climate change ahead of U.N. talks.

Eliminating such subsidies by 2020 would reduce greenhouse gas emissions blamed for global warming by 10 percent by 2050, leaders said at the time, citing data from the International Energy Agency and the Organization for Economic Cooperation and Development.

The Pittsburgh G20 statement said energy and finance ministers would develop timeframes and strategies for implementing the subsidies phase-out and report back at the next G20 summit.

That summit takes place in Toronto on June 26-27.

Though it is largely focused on the economy, the draft document makes reference to fighting global warming in ways other than phasing out subsidies for high-polluting fuels.

"We reiterate our commitment to a green recovery and to sustainable global growth, including through investments in clean energy," the draft said.

"We reaffirm our resolve to address climate change and to continue to engage constructively in the negotiations under the United Nations Framework Convention on Climate Change toward a post-2012 climate change regime with the participation of all major economies."

(Editing by Doina Chiacu)