G20 governments are still spending tens of billions of tax dollars each year to find more fossil fuels that the world can never burn, if it is to meet the challenge of climate change.

These are the findings of a report released by the Overseas Development Institute (ODI) and Oil Change International on the scale and structure of fossil fuel-exploration subsidies.

While the most recent Intergovernmental Panel on Climate Change (IPCC) synthesis report reiterates that the majority of the proven fossil fuel reserves need to stay underground to keep global warming below 2°C, G20 governments are still offering $88 billion a year worth of subsidies to fossil fuel companies for the exploration of new oil, gas, and coal reserves, the report said.

Same Support to Renewables Will Give Double the Returns

The report finds that without these subsidies, large swathes of today’s fossil-fuel development would be unprofitable. Moreover, it finds that government support to renewables gives almost double the return that can be achieved with government support to fossil fuels.

The authors emphasize that subsidies for exploration are only one part of a much wider picture of fossil fuel subsidies. In 2012 the International Energy Agency (IEA) estimated global fossil fuel consumption subsidies at $544 Billion, and a 2013 report by the International Monetary Fund (IMF) on the topic estimated that when taking the negative effects of burning fossil fuels into account, these subsidies amounted to costs as high as $1.9 trillion in 2011.

G20 Committed to Phasing Out Fossil Fuel Subsidies Five years Ago

Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), reiterated these findings at the 2014 Investors Summit on Climate Change Risk. She reminded the audience that the IMF was ready to assist countries that wanted to start decreasing their fossil fuel subsidies. The most recent 2013 UNEP Gap Report also included fossil fuel subsidy reform as one of the areas ripe for international cooperation initiatives.

While the G20 countries committed to phase out inefficient and wasteful fossil fuel subsidies already five years ago, and while these commitments were followed with similar pledges by the Asian Pacific Economic Cooperation countries, the report released today shows that a large gap continues to exist between the pledges made and the action taken today.

Commenting on the findings of the report Kevin Watkins, director of the ODI, said:

This is real money which could be put into schools or hospitals. It is simply not economic to invest like this. [The G20 countries are] diverting investment from economic low-carbon alternatives such as solar, wind and hydro-power and ... are undermining the prospects for an ambitious UN climate deal in 2015.

Oil Change International Director Steve Kretzman added:

The IPCC is quite clear about the need to leave the vast majority of already proven reserves in the ground, if we are to meet the 2C goal. The fact that despite this science, governments are spending billions of tax dollars each year to find more fossil fuels that we cannot ever afford to burn, reveals the extent of climate denial still ongoing within the G20.

Photo by Flickr user: JournoJen