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DUBAI: Governments in 82 economies subsidised fossil fuels at a cost of US1.5 trillion in 2022 – up from US$769.5 billion the previous year.

Data from the OECD and IEA indicate the offset was due to exceptionally high energy prices prompted “in part” by Russia’s invasion of Ukraine.

The OECD said direct transfers and tax expenditures totalled US$427.9 billion while the IEA noted petroleum, electricity and natural gas sold below market prices added US$1.126 trillion to the total.

Governments directed 81 percent of their fiscal support at companies and households while fossil fuel producers received 16 percent of the total or US$240 billion.

The current OECD-IEA combined estimates cover 82 major economies, spanning the OECD, G20 and 33 other major energy producing and consuming economies representing around 85 percent of the world’s total energy supply.

The IEA said consumption subsidies increased to US$1.1 trillion in 2022, a jump of 116 percent from 2021, and included a US$36.1 billion support for coal production and consumption, a 60 percent increase since 2013.

The OECD and IEA reiterated their call for phasing out – not “down” - of inefficient fossil fuel support and redirection of public funding toward the development of low-carbon alternatives, alongside improvements in energy security and energy efficiency.

Meanwhile in a letter to Sultan Al Jaber, the current president of COP 28, over 50 former presidents, prime ministers and a UN secretary general have called on the world’s leading petrostates – which banked US$4 trillion revenues last year from the high price of oil – to build up a US$1trillion climate fund for the Global South help poorer nations mitigate against and adapt to the effects of climate change.

“This is 20 times the entire global aid budget, over 30 times the budgets of all multilateral development banks combined, and 40 times the US$100 billion a year promised back in 2009 for climate mitigation and adaptation in poor countries — still not yet delivered," they said.

“In the space of just a year, a US$2.5 trillion of windfall profits were gained by the oil producer states and their national and other private companies that they have done nothing to earn,” declared the 85 signatories that included former UN secretary general Ban Ki-Moon and former prime ministers and presidents of New Zealand, Chile, Pakistan, Malawi, Costa Rica, the Netherlands, Mexico, Spain, Canada, Mauritius, Senegal, Greece.

Calling on the UAE, Saudi Arabia, Qatar and Norway to kickstart the fund with a collective US$25 billion - just over one percent of their 2022 oil and gas windfall revenues - the leaders continued: “With Sheikh Al Jaber also head of Abu Dhabi National Oil Company (ADNOC), there is an opportunity for the Gulf states and Norway, another main beneficiary of high prices, to lead the way in bridging the financing gap faced by low and middle income countries as they attempt to mitigate and adapt to climate change.”

Noting the biggest beneficiaries had been the major petrostates - increasing their export earnings to total US$973 billion dollars in 2022, up from US$381 billion in the previous 12 months - they said UAE earnings rose from US$63 billion to US$98 billion; Qatar’s increased from US$53 billion to US$86 billion; Kuwait’s from US$63 billion to $88 billion; Norway’s from US$87 billion to US$174 billion, and Saudi Arabia export earnings went up from US$190 billion to US$311 billion.

Coincidentally, COP28 opened with the launch of a loss and damage fund for the world’s poorest and most vulnerable countries pay for the irreversible impacts of climate disaster including sea level rise, ocean acidification and melting glaciers.

The UAE and Germany both pledged US$100 million with a further US$75 million from Britain, US$24.5 million from the U.S. and US$10 million from Japan.

Speaking at the opening, UN Climate Change executive secretary Simon Stiell said: “If we do not signal the terminal decline of the fossil fuel era as we know it, we welcome our own terminal decline. And we choose to pay with people’s lives.”

Acknowledging the debt to young people and civil society for “having pushed us this far” and noting they are looking at COP 28 delegates “to take responsibility for speeding things up”, he pointed out that every registrant was publicly listed: “The whole world knows who’s here. They will hold us to account on what we do, or do not do… To further ensure accountability, I am committing the [United Nations Framework Convention on Climate Change] to track all announcements made and initiatives launched. So that long after the cameras have gone, we can ensure our promises continue to serve the planet.” https://gordonandsarahbrown.com
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