The G20 group of major economies last year gave the highest level of financial support to fossil fuels since 2014, according to a new report from BloombergNEF (BNEF)and Bloomberg Philanthropies.
The BloombergNEF Climate Policy Factbook, released on Tuesday, evaluates progress that the G20 members have made in phasing out support for fossil fuels, putting a price on emissions and enforcing climate-risk disclosure.
The report states that the 19 members — the European Union is the twentieth — provided $693 billion in support to oil, gas, coal and fossil-fuel power in 2021. This figure is up 16% year on year but there is concern that the 19 are backtracking on their climate objectives.
Although support in 2020 was around $598 billion, possibly lower owing to reduced energy use during the Covid pandemic, the report states that 2021’s increase was not just due to economic recovery. The levels were 5% higher than those in 2016, during which the demand for energy was similar.
“Governments continue to subsidise fossil fuels — undermining the pledges they’ve made, harming public health and shrinking our chances of avoiding the worst impacts of climate change,” said Michael Bloomberg, the UN Secretary General’s special envoy on climate ambition and solutions, and founder of Bloomberg and Bloomberg Philanthropies.
“We need to dramatically speed up the shift to clean energy and away from coal and other fossil fuels, and this report highlights some of the most important steps governments can take.”
The report shows that G20 members have made some progress in reducing coal’s share of investment in fossil-fuels — from 4.1% in 2016 to 2.9% in 2021 — but found that coal still received $20 billion of government support last year.
“The G20 and G7 governments have announced a range of seemingly more ambitious commitments to phase out fossil-fuel subsidies,” said Victoria Cuming, head of global policy at BloombergNEF and lead author of the report.
“But they always seem to include imprecise language and caveats, giving governments wiggle room to interpret these pledges as they wish. BNEF’s analysis shows that there seems to be little evidence of those countries delivering on their promises.”
BNEF is also calling for progress in carbon pricing and climate-risk disclosure.
The report says only 12 G20 members have carbon pricing and stated that there needs to be a drastic increase for such mechanisms before there is a significant impact on global warming.
For climate-risk disclosure only two G20 members — the European Union and the UK — have passed laws or regulations to mandate disclosure for investors.
The report also highlights which countries are on the right track for each priority.
Germany, Italy, Mexico, the UK and the US all improved in their phasing out of support for fossil fuels. Meanwhile, Australia, Indonesia, Russia and South Korea are going in the wrong direction, according to the research..
The report says Canada, France, Germany, Italy, South Africa and the UK all made progress in carbon pricing plans but Brazil, India, Saudi Arabia and Turkey fell short in this area.
More countries made insufficient progress on climate-risk disclosure in 2021, with the report naming Argentina, Australia, Canada, China, India, Indonesia, Russia, Saudi Arabia and Turkey. However France, Germany, Italy and the UK showed improvements, the report claims.