Financing a Fair Energy Transition through Fossil Fuel Subsidy Reform

Policy Brief 2023 Shruti Sharma, Christopher Beaton, Livi Gerbase, Guillermina French, Chido Muzondo

This Policy Brief was first published in https://t20ind.org

The G20 committed in 2009 to phase out and rationalise fossil fuel subsidies in the medium-term. Yet subsidies exceeded US$1 trillion globally for the first time in 2022, following the global energy price crisis. Reforming public support for fossil fuels is crucial to level the playing field for renewable energy and create sustainable energy systems that will protect consumers from volatile fossil fuel prices. This frees up funds for other domestic priorities and climate mitigation and adaptation efforts. Well- planned reform can also support energy access for the poor and improve the quality of energy systems. How can the G20 reinvigorate momentum and drive the full implementation of subsidy reform commitments? This Policy Brief discusses the challenges and opportunities for advancing progress on fossil fuel subsidy reform, including specific challenges in the Global South. It draws on lessons from G20 members with high poverty rates and massive energy access needs.