Scrapping fossil fuel subsidies is the idea here.  The caption is from today’s lead editorial in the “Financial Times.”  Among its many felicitous effects, is the fact that “If effective in promoting efficient consumption, elimination would reduce the risk of runaway global warming.”  The Third Assessment Report (2001) of the Intergovernmental Panel on Climate Change recommended reducing subsidies in the energy sector and the IPCC Chair, Dr. Pachauri, has mentioned this often as a key mitigation tool.

President Obama has gone to Pittsburgh for the G20 meetings with this proposal in hand.  The AP, via “Newsday,” reported here that “Many countries, including the United States, provide tax breaks and direct payments to help produce and use oil, coal, natural gas and other fuels that spew carbon dioxide, the chief greenhouse gas. Eliminating those would provide ‘a significant down payment’ toward the U.S. goal of cutting fossil fuel emissions in half by 2050, Froman said.”  Mike Froman is the President’s national security adviser for economic affairs.

What do these subsidies look like in the US relative to those for renewables?  U.S. Fossil-Fuel Subsidies Twice That of Renewables is the answer from Bloomberg News.  “Government spending and tax breaks amounted to $72.5 billion for fossil fuels and $29 billion for renewable energy…”  This story was based on a new report from the Environmental Law Institute.  Here is an excellent graphic depicting the disparity.

Granted, many economic stimulus packages, including that of the US, have targeted investments in renewables.  (For more on green stimulus packages around the world, see this post from March.)  However, there is still a lot more money coming from governments that favor fossil fuels, and nuclear for that matter.

The OECD has just released a new book: “The Economics of Climate Change Mitigation: Policies and Options for Global Action beyond 2012.”  To quote from the Executive Summary (pp. 5-6):  “Closing the gap between domestic and international fossil fuel prices could cut GHG emissions drastically in the subsidising countries, in some cases by over 30% relative to BAU levels by 2050, and globally by 10%.”  Further, “Energy subsidy removal would also raise GDP  per capita in most of the countries concerned, including India and, to a lesser extent, China.”

In Indonesia, they’ve had some measured success in eliminating subsidies.  This “FT” article today describes the successes and the political pitfalls.  But, as Amory Lovins pointed out the other day in a brilliant talk I attended, “you can’t be afraid of the sound of breaking glass.”  (More about Lovins anon.)  G20 leaders can’t be afraid either.  This could be a truly significant advance in curbing the threat of climate change.  Let’s hope they seize the moment.

UPDATE:  Here’s a report from Bloomberg - G-20 Said to Endorse Ending Fossil-Fuel Subsidies.  There’s no timetable, as yet, but it appears that a commitment has been made.