At the G20 conference this week in China, the United States and China both ratified the Paris climate treaty negotiated last December. The two countries are the largest emitters of carbon dioxide in the world. Getting them to ratify the agreement now means there is a chance the Paris agreement could take effect by 2017 — three years ahead of schedule.
Part of the reason for the early ratification is an attempt to “Trump-proof” the accord. Donald Trump has pledged to withdraw the United States from the Paris accord if he is elected, one of the 4,612 things he says he will do in the first hour of his presidency. A minimum of 55 nations representing at least 55% of global green house emissions are required to ratify the agreement for it to become valid. If the US were to withdraw its support, the chances of other nations ratifying it would decrease markedly.
While the decision by the US and China is good news for the planet, the collection of diplomats, potentates and assorted muckety-mucks failed to take effective action to rein in the obscene amounts of money the world’s nations dole out to fossil fuel interests by way of direct and indirect subsidies.
The International Energy Agency estimates that countries spent $493 billion on consumption subsidies for fossil fuels in 2014. The UK’s Overseas Development Institute suggests G20 countries alone devoted an additional $450 billion to producer supports that year. If indirect subsidies, such as the increased health care costs caused by carbon emissions, are included, the International Monetary Fund says fossil fuel interests receive nearly $5 trillion worth of benefit from world governments each year.
Last week, the Bloomberg Editorial Board said fossil fuel subsidies were the dumbest policy they could find in the world. They called the money spent on subsidies “ridiculous” and claimed they would be economically wasteful even if they didn’t harm the environment. “They fuel corruption, discourage efficient use of energy and promote needlessly capital intensive industries. They sustain unviable fossil fuel producers, hold back innovation, and encourage countries to build uneconomic pipelines and coal-fired power plants.”
Here is the nub of it, according to the Bloomberg editors. “Last and most important, if governments are to have any hope of meeting their ambitious climate targets, they need to stop paying people to use and produce fossil fuels.” Their thoughts coincide precisely with those of Elon Musk, who has publicly called burning fossil fuels “the dumbest experiment in human history.”
A group of multi-national insurance companies called on the G20 conference to “kick away the carbon crutches” and end fossil fuel subsidies by 2020. Combined, the insurers have assets of $1.2 trillion. Mark Wilson, CEO of Aviva, one of the largest insurance companies, told the group, “Climate change in particular represents the mother of all risks – to business and to society as a whole. And that risk is magnified by the way in which fossil fuel subsidies distort the energy market. These subsidies are simply unsustainable.”
The best the G20 could do was to “reaffirm our commitment to rationalize and phase out inefficient fossil fuel subsidies, recognizing the need to support the poor, even though most analysis says such subsidies mostly support the well off. We look forward to further progress in the future,” the G20 said.