In 2022, governments worldwide spent a record amount of money – more than 1 500 billion euros – to support the fossil industry. Most of the money (1 200 billion euros) went to fossil fuel subsidies, but last year, many more investments went to renewable energy than was previously the case.

That is what the International Institute for Sustainable Development (IISD) reported on Wednesday. As the UN Climate Change Conference (COP 28) kicks off next week, this remains a central issue in climate negotiations.

Energy crisis

Fossil fuel subsidies increased substantially in 2022, reaching more than four times the annual average in the 2010s, with the jump driven by vast consumer subsidies in response to the energy crisis.

“Despite bold commitments to combat climate change, governments continue to pour trillions of dollars into the production and consumption of fossil fuels,” says Tara Laan, Senior Associate at IISD and the study’s lead author.

Deadline for fossil fuels

“Commitments need deadlines and frameworks to be effective. To turn global leaders’ words into action, it’s crucial that they fortify their efforts to shift subsidies and other financial flows away from fossil fuels and into clean energy solutions, starting at COP 28.”

IISD hopes that agreements will be made on financial support for the fossil industry during the upcoming COP28 climate summit in Dubai. The think tank calls, among other things, for a deadline for all fossil fuel subsidies – 2025 for rich countries and 2030 for developing countries. “This money should go much more toward clean energy.”

‘No credible argument…’

“There’s just no credible argument for continuing fossil fuel subsidies in the face of a climate crisis that will destroy economies and livelihoods, while clean energy sources are increasingly cost-competitive and provide an opportunity to make the world more just and equitable,” concludes Laan.

At the previous climate summit, COP27 in Sharm El Sheikh, Egypt, countries reaffirmed their commitment to accelerate efforts to phase out “inefficient subsidies”. Therefore, IISD wants to quickly gear up.