A study on energy subsidies commissioned by G20 nations found that the world could be spending $US500 billion annually to subsidise fossil fuels - the majority from subsidised end-user prices.
The report, Analysis of the Scope of Energy Subsidies and Implementation of their Phasing Out, was written by researchers from the World Bank, International Energy Association, Organisation for Economic Co-operation and Development and Organization of Petroleum Exporting Countries.
To put the estimates in perspective, estimated agriculture subsidies in OECD countries are over $US300b per year and new support to be mobilised jointly by developed countries for climate change actions would amount to $US100b per year by 2020, of which $US30b for immediate action till 2012 has been agreed in the Copenhagen Accord reached in December 2009.
The report is still in a draft form, and the report notes there is no systematic reporting of energy subsidies in OECD countries.
It states: "Energy subsidies can have unintended consequences and be wasteful by placing large negative fiscal impacts, distorting international trade, discouraging energy conservation and energy efficiency, and therefore increase GHG emissions, and not always helping the people who need them most."
Growth Energy, a coalition of US ethanol supporters, state the report is a confirmation that renewable ethanol can enhance US national security as well as "dramatically reduce the transfer of wealth that occurs today," a statement from Growth Energy CEO Tom Buis said.
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