Will G20 Take to Obama’s Fossil Fuel Pitch?

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Barack Obama has indicated that at this week’s G20 summit in Pittsburgh his administration will urge member countries to end subsidies to fossil fuels—which receive upwards of $67 billion from governments around the world. But exactly what he means by that is not yet clear.

The administration’s plans to push the issue of subsidies leaked last week in a letter by Obama adviser on international economic affairs Michael Froman. Froman indicates that the US should call on members of the G20 to eliminate all fossil fuel and electricity subsidies, as a “logical step in combating global climate change.” From the letter:

Eliminating fossil fuel and electricity subsidies would help energy markets work better and improve our energy security. It is also a logical step in combating global climate change, as it would encourage energy conservation and facilitate new technologies. The move away from subsidies should be managed to protect those most vulnerable to price increases. The G-20 should commit to take the lead in eliminating non-needs based fossil fuel and electricity subsidies and to provide technical assistance to non-G-20 countries taking steps to reduce fossil fuel and electricity subsidies.

Obama proposed eliminating some domestic subsidies for fossil fuels in his 2010 budget, but so far any attempts to change US policy has been successfully blocked by coal and oil state representatives. And they’ve been subsidizing fossil fuels extensively. Last week, the Environmental Law Institute released a report totaling government expenditures on different energy sources, both in direct spending and in foregone revenue resulting from tax breaks. The report finds that while the government spent $72.5 billion on fossil fuels between 2002 and 2008, it spent just $29 billion on renewables. And more than half of the renewables money—$16.8 billion—went to corn ethanol, which is of questionable environmental benefit.

One of the big questions about Obama’s subsidy reform pitch will be whether it includes more than just the money fossil fuels receive through direct spending, which is far less than than the amount funneled to fossil fuels in the form of forgone government revenue through tax breaks and loopholes.

From 2002 to 2008, the US government directly spent $16.3 billion on petroleum, natural gas, and coal products—and gave the industry another $53.9 billion in the form of tax breaks. Another $2.3 billion went to carbon capture and storage (CCS) technology, nearly all of that in the form of direct government spending. And if the Senate passes a climate bill that looks anything like the House bill, it will include $60 billion for CCS research and development through 2025, as well as bonus emission permits for early movers on carbon capture and storage for every ton of CO2 they sequester.

Obama’s pitch and its reception will be among the more interesting discussions at the G20, although climate and energy issues will likely take a backseat to economic concerns.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate