Fossil fuel subsidies create unhealthy market incentives, artificially directing investment away from clean technologies. To help accelerate the transition to a climate neutral economy they need to be phased out.
The momentum behind eliminating fossil fuels is growing; As the COP21 climate negotiations begin in Paris, 37 governments and hundreds of business leaders have endorsed the Fossil Fuel Subsidy Reform Communiqué, an urgent call for action to eliminate perverse fossil fuel subsidies. As momentum builds it is critical for business leaders to understand the implications of the end of fossil fuel subsidies and how to lead this transition from the front.
In this, the first ‘The B Team Business Briefing‘, we explore current fossil fuel subsidy trends, the impacts of phasing them out, and what progressive businesses need to do to accelerate the transition.
- Fossil Fuel subsidies cost the world US $490 billion in 2014
- Phasing out fossil fuel subsidies could result in CO2 emissions reductions of up to 13% by 2050
- Reforming fossil fuel subsidies would create a “pull” towards low carbon businesses and facilitate investment in a fairer and more sustainable economy.
- Fossil fuel subsidies introduce a distortion into the market place that impacts the investment and operational decisions made by businesses.
This briefing was developed in with input and support from International Institute for Sustainable Development and Prince of Wales Corporate Leaders Group.
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