Removing fossil fuel subsidies is an important part of emission-reduction strategies, as many fossil fuel enterprises will cease to be profitable without subsidy, and could then give way to lower carbon alternatives being taken up.
Governments around the world spend US$400-600 billion a year to keep domestic prices for coal, oil and as products artificially low. Removing these subsidies could release significant financial resources for investment in sustainable development. Furthermore, there are indirect subsidies via tax breaks and other incentives, which are estimated at an additional US$100 billion globally.
The challenge is, if subsidies are removed, it will have an effect on workers in these sectors, so again these actions must done in a JUST TRANSITION context. Quantifying fossil fuel subsidies can be very tricky, as there is often a substantial lack of transparency on the subject, and this is particularly true in South Africa.
While FFFSR has been around since 2010, the launch of the network in 2018 will hopefully expand the work being done. If South Africa were to join this grouping, that would send a good signal about a commitment to addressing this topic.
Richard Halsey at COP24, 12 Dec.
