Tax & Environment: OECD and IEA recommend reforming fossil-fuel subsidies to improve the economy and the environment
04/10/2011 – Governments and taxpayers spent about half a trillion US dollars last year supporting the production and consumption of fossil fuels. Removing inefficient subsidies would raise national revenues and reduce greenhouse-gas emissions, according to OECD and IEA analyses.
The G20 leaders in 2009 agreed to phase out subsidies that “encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change”. OECD and IEA data and analysis are contributing to the follow-up on this commitment by the G20.
To assist governments’ understanding of the nature and scale of their policies supporting fossil fuels, the OECD has compiled the first-ever Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels. With detailed information of over 250 mechanisms that support fossil fuel production and use in OECD countries, the Inventory will be updated regularly and expanded over time to cover more countries and more support mechanisms.