China Dialogue is an independent organisation dedicated to promoting a common understanding of China’s urgent environmental challenges.
We encourage you to republish China Dialogue articles, online or in print, under the Creative Commons license. Please read our republishing guidelines to get started.
Oil drilling rigs off Invergordon, Scotland. Two-thirds of the G20’s public finance for energy went to fossil fuels in 2019–2020 (Image: Jiri Vondrous / Alamy)
Catherine Early
The G20 group of nations provided nearly US$200 billion in support of fossil fuels in 2021, despite the worsening impacts of the climate crisis and their pledge in 2009 to phase out “inefficient” subsidies.
The Group of 20 is an intergovernmental forum of 19 countries and the European Union. These include most of the world’s largest economies, including those of many developing nations, and together account for over 80% of world GDP.
Subsidies to the sector had fallen to $147bn in 2020 as the impacts of travel restrictions due to Covid-19 weakened demand, but they rebounded in 2021, rising by 29% to $190bn. Though full data is not yet available for 2022, financial support to both producers and consumers of fossil fuels is projected to have risen, partly due to spiralling energy prices in response to the Russian invasion of Ukraine.
In total, 63% of the G20’s public finance for energy went to fossil fuels in 2019–2020. The countries with the highest total subsidies for fossil fuels were China, Indonesia and the UK.
The stocktake of G20 climate action is outlined in the latest annual report from Climate Transparency, an international partnership of organisations including Climate Analytics, the Overseas Development Institute (ODI), and the Berlin Governance Platform.
The report points to the G20’s 2009 commitment to “phase out and rationalise, over the medium term, inefficient fossil fuel subsidies”, which it reaffirmed last year.
“I think we can safely say we are now in that ‘medium term’ and it’s clear the G20 has failed to deliver, instead continuing to use public funds to distort the market in favour of fossil fuels,” said Ipek Gençsü, senior research fellow at ODI, and finance lead of the report.
She cautioned that the figures were likely an underestimate since they are based on self-reporting by G20 governments to the OECD. Independent analysis carried out by Climate Transparency members had found unreported subsidy data, she said.
The Intergovernmental Panel on Climate Change (IPCC) has warned that emissions must be halved by 2030, and that the extraction of fossil fuels needs to stop to keep the 1.5C warming limit of the Paris Agreement within reach, the report notes.
Despite this, energy-related CO2 emissions rebounded 5.9% across G20 countries in 2021, to above pre-pandemic levels. The G20 is responsible for three-quarters of the world’s emissions, said Bill Hare, chief executive of Climate Analytics.
“These are the world’s biggest economies, many of them home to the finance and technologies needed to tackle the climate crisis. We are now in a moment where geopolitics and energy security issues are combining to really hammer home the benefits of cheap renewables, yet we are still seeing many of these governments turning to fossil fuels as the solution,” he added.
More positively, the share of renewables in the power generation mix increased in all G20 countries between 2016 and 2020. The strongest increases were in the UK (+67%), Japan (+48%) and Mexico (+40%).
The lowest increases, all well below the five-year G20 average of +22.5%, were observed in Russia (+16%) and Italy (+14%). Despite this longer-term growth, the G20’s share of renewables fell slightly between 2020–21.
Fossil fuels still dominate the energy mix, with the transition to renewables too slow, Hare said.
“The energy crisis really reinforces the need to get on with renewables,” said Hare. “What stands in the way of progress is the need for governments in the G20 to take the political decisions to get the transformation under way,” he said.
The developed nations of the G20 are still failing to provide the $100 billion per year in climate finance to the world’s developing nations that they promised to by 2020. The Climate Transparency assessment calculated how much each country should contribute as its fair share, based on historical emissions. Only three of eight countries have met the mark. The US contributed just 5% of what it owes, while the UK, Italy, Canada and Australia also fell short.
More finance needs to be targeted at adapting to the impacts of climate change, Hare said. In addition, finance for loss and damage caused by irreversible impacts, such as sea-level rise and salination of ground water, is going to be a big theme going forward. So far, it has not really been on the agenda of the G20, he added.
The debate could be complicated by the fact that China and India are now large emitters, and much wealthier than they were, so should start thinking about how they could contribute finance for loss and damage, Hare said.
“There’s a wide variety of views within the G20 on loss and damage. There’s been a conflict between the rich developed countries and the poor developing countries on this issue,” he said. “But there are signs behind the scenes of progress being made. I would hope the countries like India and China would join what I’m hoping is an emerging consensus on how to set up a loss and damage mechanism.”
We encourage you to republish China Dialogue articles, online or in print, under the Creative Commons license. Please read our republishing guidelines to get started.
Catherine Early
Catherine Early is a freelance environmental journalist. You can find her on Twitter @Cat_Early76.
Get a weekly email featuring the pick of our articles, a digest of environmental stories from China, occasional news on events we host and our annual readership survey.
Please enter an email address
We’ve sent you an email with a confirmation link. Click it to be added to the list. If you can’t see the message, please check your junk mail.
我们向您的邮箱发送了一封确认邮件，请点击邮件中的确认链接。如果您未收到该邮件，请查看垃圾邮件。
China Dialogue uses cookies to give you the best experience on our website.
You can find out more about which cookies we are using or switch them off in .
China Dialogue uses cookies to provide you with the best user experience possible. Cookie information is stored in your browser. It allows us to recognise you when you return to China Dialogue and helps us to understand which sections of the website you find useful.
Required Cookies should be enabled at all times so that we can save your preferences for cookie settings.
China Dialogue – chinadialogue is an independent organisation dedicated to promoting a common understanding of China’s urgent environmental challenges. Read our privacy policy.
Cloudflare – Cloudflare is a service used for the purposes of increasing the security and performance of web sites and services. Read Cloudflare’s privacy policy and terms of service.
China Dialogue uses several functional cookies to collect anonymous information such as the number of site visitors and the most popular pages. Keeping these cookies enabled helps us to improve our website.
Google Analytics – The Google Analytics cookies are used to gather anonymous information about how you use our websites. We use this information to improve our sites and report on the reach of our content. Read Google’s privacy policy and terms of service.
This website uses the following additional cookies:
Google Inc. – Google operates Google Ads, Display & Video 360, and Google Ad Manager. These services allow advertisers to plan, execute and analyze marketing programs with greater ease and efficiency, while enabling publishers to maximize their returns from online advertising. Note that you may see cookies placed by Google for advertising, including the opt out cookie, under the Google.com or DoubleClick.net domains.
Twitter – Twitter is a real-time information network that connects you to the latest stories, ideas, opinions and news about what you find interesting. Simply find the accounts you find compelling and follow the conversations.
Facebook Inc. – Facebook is an online social networking service. China Dialogue aims to help guide our readers to content that they are interested in, so they can continue to read more of what they enjoy. If you are a social media user, then we are able to do this through a pixel provided by Facebook, which allows Facebook to place cookies on your web browser. For example, when a Facebook user returns to Facebook from our site, Facebook can identify them as part of a group of China Dialogue readers, and deliver them marketing messages from us, i.e. more of our content on biodiversity. Data that can be obtained through this is limited to the URL of the pages that have been visited and the limited information a browser might pass on, such as its IP address. In addition to the cookie controls that we mentioned above, if you are a Facebook user you can opt out by following this link.
Linkedin – LinkedIn is a business- and employment-oriented social networking service that operates via websites and mobile apps.