Despite comprehending urgency in mitigation for climate change that requires swift actions in energy and industry transformations, governments of various countries still managed to arrive at an all-time high in subsidization for fossil fuel energy at US$1 trillion during 2022.
The International Energy Agency (IEA)’s survey shows that governments of various countries are successively proposing integrated subsidies on petroleum, natural gas, electricity, and coal amidst the surging energy prices that are affecting the economy, which led to an all-time high subsidization in 2022.
This may be a dilemma for each country, since the level of fuel inflation that is spiraling out of control is something to deal with aside from climate change and low-carbon transformation. In addition, leaders had also promised to terminate similar subsidies at COP26 in November 2021, but have also invested significant funds in the energy field.
According to BloombergNEF’s data, governments around the world had doubled in total expenditures compared to the global investment on renewable energy during 2022. IEA’s report pointed out that COP26 emphasizes that a gradual cancelation of subsidization on fossil fuels is the foundation in marching towards clean energy, however, the existing global energy crisis has also highlighted political challenges.
Many countries are currently recovering from the pandemic, and these subsidies, frankly speaking, are able to protect consumers from the surging energy prices. Russia, after invading Ukraine in 2022, has reduced natural gas provision, and the EU has thus spent US$349 billion to lower the electricity bills of the public since quite a number of European countries are relatively dependent on natural gas for power generation by regarding the energy source as an important power dispatch.
(Cover photo source: shutterstock)