Some countries have been very aggressive in their approach to fossil-fuel subsidies. According to the International Energy Agency and the OECD, oil-producer Saudi Arabia is fueling almost ten percent of its economic power into fossil fuels. Indonesia, Argentina, Russia and India are vested at two to three percent. China, on the other hand, cut its subsidies in half between 2013 and 2015 in the course of their strong environmental agenda.
Certainly there are sociopolitical reasons at play here. Heat and electricity, often produced by fossil fuels, are a basic need and should be available to everyone. There are, however, advantages to moving towards clean energy. Advantages to our climate, our health and to our economies. And surely, unchecked climate change with rising sea-levels and increasing extreme weather events will pose more significant challenges than the phasing-out of fossil-fuel subsidies. The current collapse in oil prices is a timely window of opportunity for governments to take action.
To find out more about how the world’s 19 largest economies are faring in their efforts to transition to low-carbon economies, please see our new Allianz Climate and Energy Monitor.
