Synergy Wave System

July 9, 2019

G:20 - Steps to beat the energy crisis

G:20 - Steps to beat the energy crisis

The Group of Twenty (G20) is an international forum whose members include 19 countries and the European Union. The G20 economies collectively account for around 90 per cent of the gross world product (GWP), 80 per cent of world trade, two-thirds of the world population, and approximately half of the world land area. It came into effect in 1999 to discuss policies on international financial stability. Since then, its scope has widened. Today, it discusses and puts forth policies on employment, taxes, energy, food. The G20 is an apt model for global cooperation. Its premise rests in the belief that economic integration requires integrated international governance.

The energy crisis is a real concern. The world’s demand for electricity grids and fuel for vehicles is rising. But the earth’s limited natural resources are diminishing. Fossil fuel is the main source of energy and is in short supply. Fossil fuels are natural resources and take thousands of years to replenish. Moreover, they are detrimental to the environment.

The bottleneck in demand and supply gives rise to energy prices. To keep prices down, the world governments offer fossil fuel subsidies. These are in the form of tax rebates, direct funding, loans, allocating land and water at cheap rates. Subsidies to fossil fuels encourage climate change, environmental pollution, impacting public health.

Besides, it gives birth to another monster – over-consumption.

The G20 nations did a study to measure the impact of fossil fuel subsidies on wasteful use of resources. They worked with OECD, IEA, OPEC and World Bank for the purpose. They reached the conclusion that ending subsidies would reduce fossil fuel consumption. This would lower environmental hazards, galvanizing the world to move towards renewable energies.

The latest report from OECD and IEA records the fossil fuel subsidies across economies. It states that OECD governments spend a whopping USD 75 Billion a year on subsidies. It also indicates that reducing subsidies will raise revenues and reduce carbon footprint.

In 2009, G20 nations reached a unanimous decision to end fossil fuel subsidies. The Obama administration spearheaded the resolution. G20 summits, in later years, have reiterated the commitment. But so far, no concrete policies or change has come into effect. In 2018, the G20 President, China, resolved to fix a certain date to phase out fossil fuel subsidies.

Despite the commitment to fight against climate change, countries continue to fund subsidies. G20 countries are apparently still paying over USD 1000 per citizen, which amounts to trillions of dollars in fossil fuel subsidies.

It seems fossil fuel industry has a stranglehold over policymakers. So long as that continues unabated, reform will remain on paper.