Phasing out fossil fuel subsidies

Excellencies, ladies and gentlemen.

Climate change is no longer something only our grandchildren will have to worry about.

It is happening. Here and now.

As leaders, we have to deal with the consequences of climate change every day.

It is already having wide-reaching implications for top priority policy areas such as humanitarian assistance, mass migration and security.

Facing a challenge of this magnitude, we must make use of all available tools to cut emissions and adapt to the changes that will come.

What we should not do is to undermine our own efforts.

But fossil fuels subsidies are doing just that. They are negative climate finance. 

They contradict our common objectives of cutting emissions.

They weaken our efforts to promote renewable alternatives.

It is positive that we have committed to mobilising USD 100 billion in climate financing by 2020.

But it is a great paradox that fossil fuel subsidies amount to five times that figure.

The International Energy Agency has estimated the value of fossil fuels subsidies worldwide at USD 490 billion in 2014.

Developed countries are handing out fossil fuels subsidies with one hand, and contributing to climate financing with the other.

Many developing countries are receiving climate finance while also subsidising fossil fuels.

This cannot continue.  

Our promise to raise USD 100 billion in climate financing by 2020 should be accompanied by a common determination to end all fossil fuel subsidies.  

Today, fossil fuel subsidies are contributing to huge budget deficits in in many countries.

It is money that can be put to better work. 

The removal of fossil fuel subsidies will free up financing for education, health, infrastructure and renewable energy.

And let’s not forget the positive health effects of reduced pollution. The World Health Organization estimates the number of premature deaths due to air pollution to be 7 million people – every year.  

The argument is so compelling that the real question is: How can we afford not to remove fossil fuel subsidies?

Subsidy removal is possible – and brave nations have led the way.

We welcome reforms undertaken by countries like Indonesia, Malaysia, India, Morocco and Egypt.

All countries, developing and developed, including Norway, should explore opportunities to phase out fossil fuel subsidies and stimulate investments in low-carbon energy systems.

Putting a price on carbon is one effective way of encouraging low-emission investments and reinforcing subsidies reform at the same time.

Carbon pricing is the opposite of fossil fuel subsides.

Norway was one of the first countries to introduce a carbon tax.

It has spurred investments in renewable energy and energy efficiency solutions. It will make our technology and our companies more competitive in the low-carbon markets of the future.

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The growing support for fossil fuel reform is encouraging.

And the friends of fossil fuel reform provide an important platform for sharing experiences and best practices.

It is high time we eliminated negative climate finance.

Rather, we must direct our efforts and resources to building a sustainable low-carbon future.

Thank you.