Coal Subsidies Triple in G20 Countries Despite Climate Crisis



Although the world’s major economies promised to phase out all aid for the coal industry ten years ago, they have in fact tripled the amount of money they have given to coal-fired power stations in recent years according to a new report.

The study by the Overseas Development Institute (ODI) showed that China, India, and Japan are the biggest financial supporters of coal, followed by South Korea, South Africa, and the US.

The research was compiled from adding up financial and tax subsidies handed out to the coal mining industry and the building and maintaining of coal-fired power stations. The amount paid out in overall subsidies increased from USD$17bn in 2014 to USD$47bn in 2017.

However, these figures do not show the full picture as many countries in the G20 are not transparent about the many ways coal is subsidised, so if anything, the figures are likely to be higher.

Japan will host the G20 summit in Osaka later this week and green campaigners are planning protests across the country.

Japanese coal subsidies fly in the face of previous comments by the Japanese Prime Minister, Shinzo Abe, about the perils of the climate crisis.

“Climate change can be life-threatening to all generations … We must take more robust actions and reduce the use of fossil fuels,” Abbe said last September.

Coal: The Biggest Culprit

Coal-fired power stations were the biggest single contributor to the rise in global carbon emissions in 2018 and emissions continue to rise year on year. Scientists have warned that unless emissions fall by half over the next decade then the climate crisis will rapidly escalate with millions of people affected by drought, floods, and poverty.

“It has now been 10 years since the G20 committed to phasing out fossil fuel subsidies, yet astonishingly some governments are actually increasing the amount they give to coal power plants,” said Ipek Gençsü, a research fellow at ODI and lead author of the report.

According to the Powering Past Coal Alliance, coal-generated electricity must be phased out completely by 2050 in order to limit global heating to below 2C.

Coal currently provides about 40% of the world’s electricity, but because new coal-fired power plants have a life of about 40 years, building them now could lock countries into using them beyond the time by which they must be phased out.

Despite the dire warnings, coal subsidies continue in many countries because of powerful coal lobbies and political considerations of governments who are in effect kicking the can down the road for future generations to deal with.

Coal subsidies are continuing even though the coal industry has been in terminal decline for years. Investments in the actual number of coal-fired power stations in the world have fallen by 75% between 2015 and 2018.

“They are just kicking the can down the road. The money would be much better channelled to managing the [low carbon] transition and setting an end date,” said Ivetta Gerasimchuk from the International Institute for Sustainable Development and co-author of the report.

Editorial Team