Obama urges world to end fossil fuel subsidies
WASHINGTON — President Barack Obama is calling on the world to end massive government subsidies that encourage the use of fossil fuels blamed for global warming.
The president, who is set to host the G-20 economic summit opening Thursday in Pittsburgh, will propose a gradual elimination, with the time frame to be determined, according to White House officials.
"Later this week, I will work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge," Obama said Tuesday at the United Nations global warming summit.
Mike Froman, Obama's national security adviser for economic affairs, said the main value of the proposal would be if it were multilateral. He declined to say if Obama was willing to go it alone and try to eliminate such subsidies just in the United States.
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.
The costs of these subsidies are estimated in the tens of billions of dollars annually worldwide. In the U.S. alone, the federal government gave $72 billion in subsidies to the fossil fuel industry between 2002 and 2008, according to a study by the Environmental Law Institute.
The subsidies encourage the burning of fuel that leads to global warming and other pollution, Froman said. Eliminating the subsidies would help slow global warming, reduce health problems from pollution, make the United States more energy-independent and foster economic growth, he said.
Fossil fuel industry officials said the idea did not make sense and would hurt U.S. energy security. Environmentalists cheered the idea as a constructive use of free markets.
The Organization for Economic Cooperation and Development said in a report last week removing fossil fuel subsidies could reduce greenhouse gas emissions by more than 10 percent in 2050. OECD is a Paris-based international organization with 30 democratic countries as members.
